Correlation Between Tucows and Nuvei Corp

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

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

Diversification Opportunities for Tucows and Nuvei Corp

-0.75

Correlation Coefficient

Tucows  Nuvei Corp

Pay attention - limited upside

The 3 months correlation between Tucows and Nuvei is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tucows Inc and Nuvei Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvei Corp and Tucows 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 Tucows Inc are associated (or correlated) with Nuvei Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvei Corp has no effect on the direction of Tucows i.e., Tucows and Nuvei Corp go up and down completely randomly.

Pair Corralation between Tucows and Nuvei Corp

Considering the 90-day investment horizon Tucows Inc is expected to under-perform the Nuvei Corp. In addition to that, Tucows is 1.17 times more volatile than Nuvei Corp. It trades about -0.01 of its total potential returns per unit of risk. Nuvei Corp is currently generating about 0.04 per unit of volatility. If you would invest  2,483  in Nuvei Corp on September 19, 2024 and sell it today you would earn a total of  916.00  from holding Nuvei Corp or generate 36.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.97%
Values	Daily Returns

Tucows Inc  vs.  Nuvei Corp

Tucows Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tucows Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nuvei Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Nuvei Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Nuvei Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tucows and Nuvei Corp

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

The idea behind Tucows Inc and Nuvei 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.