Correlation Between Nxu and BLACK

Can any of the company-specific risk be diversified away by investing in both Nxu and BLACK at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nxu and BLACK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nxu Inc and BLACK HILLS P, you can compare the effects of market volatilities on Nxu and BLACK and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nxu with a short position of BLACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nxu and BLACK.

Diversification Opportunities for Nxu and BLACK

-0.51

Correlation Coefficient

Nxu  BLACK

Excellent diversification

The 3 months correlation between Nxu and BLACK is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nxu Inc and BLACK HILLS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLACK HILLS P and Nxu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nxu Inc are associated (or correlated) with BLACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLACK HILLS P has no effect on the direction of Nxu i.e., Nxu and BLACK go up and down completely randomly.

Pair Corralation between Nxu and BLACK

Considering the 90-day investment horizon Nxu Inc is expected to generate 323.99 times more return on investment than BLACK. However, Nxu is 323.99 times more volatile than BLACK HILLS P. It trades about 0.29 of its potential returns per unit of risk. BLACK HILLS P is currently generating about -0.24 per unit of risk. If you would invest  27.00  in Nxu Inc on October 5, 2024 and sell it today you would earn a total of  1,128  from holding Nxu Inc or generate 4177.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Nxu Inc  vs.  BLACK HILLS P

Nxu Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nxu Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Nxu unveiled solid returns over the last few months and may actually be approaching a breakup point.

BLACK HILLS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BLACK HILLS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BLACK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nxu and BLACK

The main advantage of trading using opposite Nxu and BLACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nxu position performs unexpectedly, BLACK can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BLACK will offset losses from the drop in BLACK's long position.

The idea behind Nxu Inc and BLACK HILLS P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.