Correlation Between SCHMID Group and Nuvve Holding

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

By analyzing existing cross correlation between SCHMID Group NV and Nuvve Holding Corp, you can compare the effects of market volatilities on SCHMID Group and Nuvve Holding 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 SCHMID Group with a short position of Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHMID Group and Nuvve Holding.

Diversification Opportunities for SCHMID Group and Nuvve Holding

0.23

Correlation Coefficient

SCHMID Group  Nuvve Holding

Modest diversification

The 3 months correlation between SCHMID and Nuvve is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp and SCHMID Group 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 SCHMID Group NV are associated (or correlated) with Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of SCHMID Group i.e., SCHMID Group and Nuvve Holding go up and down completely randomly.

Pair Corralation between SCHMID Group and Nuvve Holding

Assuming the 90 days horizon SCHMID Group NV is expected to generate 2.15 times more return on investment than Nuvve Holding. However, SCHMID Group is 2.15 times more volatile than Nuvve Holding Corp. It trades about 0.16 of its potential returns per unit of risk. Nuvve Holding Corp is currently generating about -0.04 per unit of risk. If you would invest  22.00  in SCHMID Group NV on September 27, 2024 and sell it today you would earn a total of  6.00  from holding SCHMID Group NV or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

SCHMID Group NV  vs.  Nuvve Holding Corp

SCHMID Group NV

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCHMID Group NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, SCHMID Group showed solid returns over the last few months and may actually be approaching a breakup point.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp 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 rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SCHMID Group and Nuvve Holding

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

The idea behind SCHMID Group NV and Nuvve Holding Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.