Correlation Between Skye Bioscience, and ProShares Nanotechnology

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

By analyzing existing cross correlation between Skye Bioscience, Common and ProShares Nanotechnology ETF, you can compare the effects of market volatilities on Skye Bioscience, and ProShares Nanotechnology 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 Skye Bioscience, with a short position of ProShares Nanotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skye Bioscience, and ProShares Nanotechnology.

Diversification Opportunities for Skye Bioscience, and ProShares Nanotechnology

0.23

Correlation Coefficient

Skye Bioscience,  ProShares Nanotechnology

Modest diversification

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

Pair Corralation between Skye Bioscience, and ProShares Nanotechnology

Given the investment horizon of 90 days Skye Bioscience, Common is expected to under-perform the ProShares Nanotechnology. In addition to that, Skye Bioscience, is 3.24 times more volatile than ProShares Nanotechnology ETF. It trades about -0.07 of its total potential returns per unit of risk. ProShares Nanotechnology ETF is currently generating about -0.03 per unit of volatility. If you would invest  4,967  in ProShares Nanotechnology ETF on October 8, 2024 and sell it today you would lose (202.00) from holding ProShares Nanotechnology ETF or give up 4.07% of portfolio value over 90 days.

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

Skye Bioscience, Common  vs.  ProShares Nanotechnology ETF

Skye Bioscience, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skye Bioscience, Common 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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ProShares Nanotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares Nanotechnology ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ProShares Nanotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Skye Bioscience, and ProShares Nanotechnology

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

The idea behind Skye Bioscience, Common and ProShares Nanotechnology ETF 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 CEOs Directory module to screen CEOs from public companies around the world.