Correlation Between RESAAS Services and Nowigence

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

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

Diversification Opportunities for RESAAS Services and Nowigence

0.0

Correlation Coefficient

RESAAS Services  Nowigence

Pay attention - limited upside

The 3 months correlation between RESAAS and Nowigence is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RESAAS Services and Nowigence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nowigence and RESAAS Services 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 RESAAS Services are associated (or correlated) with Nowigence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nowigence has no effect on the direction of RESAAS Services i.e., RESAAS Services and Nowigence go up and down completely randomly.

Pair Corralation between RESAAS Services and Nowigence

If you would invest  50.00  in Nowigence on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Nowigence or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

RESAAS Services  vs.  Nowigence

RESAAS Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RESAAS Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Nowigence

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nowigence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nowigence is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with RESAAS Services and Nowigence

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

The idea behind RESAAS Services and Nowigence 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.