Correlation Between Sharps Technology and Nocera

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

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

Diversification Opportunities for Sharps Technology and Nocera

-0.04

Correlation Coefficient

Sharps Technology  Nocera

Good diversification

The 3 months correlation between Sharps and Nocera is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology Warrant and Nocera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nocera Inc and Sharps Technology 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 Sharps Technology Warrant are associated (or correlated) with Nocera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nocera Inc has no effect on the direction of Sharps Technology i.e., Sharps Technology and Nocera go up and down completely randomly.

Pair Corralation between Sharps Technology and Nocera

Assuming the 90 days horizon Sharps Technology is expected to generate 1.81 times less return on investment than Nocera. In addition to that, Sharps Technology is 2.0 times more volatile than Nocera Inc. It trades about 0.01 of its total potential returns per unit of risk. Nocera Inc is currently generating about 0.03 per unit of volatility. If you would invest  95.00  in Nocera Inc on September 15, 2024 and sell it today you would lose (5.00) from holding Nocera Inc or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.25%
Values	Daily Returns

Sharps Technology Warrant  vs.  Nocera Inc

Sharps Technology Warrant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Technology Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Sharps Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nocera Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nocera Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nocera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sharps Technology and Nocera

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

The idea behind Sharps Technology Warrant and Nocera Inc 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 Positions Ratings module to 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.