Correlation Between Olin and Nano One
Can any of the company-specific risk be diversified away by investing in both Olin and Nano One 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 Olin and Nano One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olin Corporation and Nano One Materials, you can compare the effects of market volatilities on Olin and Nano One 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 Olin with a short position of Nano One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olin and Nano One.
Diversification Opportunities for Olin and Nano One
Very poor diversification
The 3 months correlation between Olin and Nano is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Olin Corp. and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials and Olin 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 Olin Corporation are associated (or correlated) with Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Olin i.e., Olin and Nano One go up and down completely randomly.
Pair Corralation between Olin and Nano One
Considering the 90-day investment horizon Olin Corporation is expected to under-perform the Nano One. But the stock apears to be less risky and, when comparing its historical volatility, Olin Corporation is 1.53 times less risky than Nano One. The stock trades about -0.17 of its potential returns per unit of risk. The Nano One Materials is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Nano One Materials on December 27, 2024 and sell it today you would lose (15.00) from holding Nano One Materials or give up 25.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Olin Corp. vs. Nano One Materials
Performance |
Timeline |
Olin |
Nano One Materials |
Olin and Nano One Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Olin and Nano One
The main advantage of trading using opposite Olin and Nano One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olin position performs unexpectedly, Nano One 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 Nano One will offset losses from the drop in Nano One's long position.Olin vs. Select Energy Services | Olin vs. Westlake Chemical | Olin vs. Sensient Technologies | Olin vs. Axalta Coating Systems |
Nano One vs. G6 Materials Corp | Nano One vs. Haydale Graphene Industries | Nano One vs. Orica Limited | Nano One vs. Johnson Matthey PLC |
Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |