Correlation Between POET Technologies and Nubeva Technologies

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

By analyzing existing cross correlation between POET Technologies and Nubeva Technologies, you can compare the effects of market volatilities on POET Technologies and Nubeva Technologies 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 POET Technologies with a short position of Nubeva Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of POET Technologies and Nubeva Technologies.

Diversification Opportunities for POET Technologies and Nubeva Technologies

0.2

Correlation Coefficient

POET Technologies  Nubeva Technologies

Modest diversification

The 3 months correlation between POET and Nubeva is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding POET Technologies and Nubeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nubeva Technologies and POET Technologies 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 POET Technologies are associated (or correlated) with Nubeva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nubeva Technologies has no effect on the direction of POET Technologies i.e., POET Technologies and Nubeva Technologies go up and down completely randomly.

Pair Corralation between POET Technologies and Nubeva Technologies

Assuming the 90 days horizon POET Technologies is expected to generate 0.84 times more return on investment than Nubeva Technologies. However, POET Technologies is 1.19 times less risky than Nubeva Technologies. It trades about 0.0 of its potential returns per unit of risk. Nubeva Technologies is currently generating about -0.03 per unit of risk. If you would invest  698.00  in POET Technologies on December 21, 2024 and sell it today you would lose (88.00) from holding POET Technologies or give up 12.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

POET Technologies  vs.  Nubeva Technologies

POET Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days POET Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, POET Technologies is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nubeva Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nubeva Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with POET Technologies and Nubeva Technologies

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

The idea behind POET Technologies and Nubeva Technologies 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.