Correlation Between Nxu and PACIFIC

Can any of the company-specific risk be diversified away by investing in both Nxu and PACIFIC 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 PACIFIC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nxu Inc and PACIFIC GAS ELECTRIC, you can compare the effects of market volatilities on Nxu and PACIFIC 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 PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nxu and PACIFIC.

Diversification Opportunities for Nxu and PACIFIC

-0.32

Correlation Coefficient

Nxu  PACIFIC

Very good diversification

The 3 months correlation between Nxu and PACIFIC is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nxu Inc and PACIFIC GAS ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS ELECTRIC 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS ELECTRIC has no effect on the direction of Nxu i.e., Nxu and PACIFIC go up and down completely randomly.

Pair Corralation between Nxu and PACIFIC

Considering the 90-day investment horizon Nxu Inc is expected to generate 70.45 times more return on investment than PACIFIC. However, Nxu is 70.45 times more volatile than PACIFIC GAS ELECTRIC. It trades about 0.2 of its potential returns per unit of risk. PACIFIC GAS ELECTRIC is currently generating about -0.3 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  70.00  from holding Nxu Inc or generate 259.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Nxu Inc  vs.  PACIFIC GAS ELECTRIC

Nxu Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nxu Inc are ranked lower than 10 (%) 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.

PACIFIC GAS ELECTRIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACIFIC GAS ELECTRIC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PACIFIC GAS ELECTRIC investors.

Pair Trading with Nxu and PACIFIC

The main advantage of trading using opposite Nxu and PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nxu position performs unexpectedly, PACIFIC 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 PACIFIC will offset losses from the drop in PACIFIC's long position.

The idea behind Nxu Inc and PACIFIC GAS ELECTRIC 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 Global Correlations module to find global opportunities by holding instruments from different markets.