Correlation Between FREEPORT and NanoTech Gaming

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

By analyzing existing cross correlation between FREEPORT MCMORAN INC 4625 and NanoTech Gaming, you can compare the effects of market volatilities on FREEPORT and NanoTech Gaming 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 FREEPORT with a short position of NanoTech Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREEPORT and NanoTech Gaming.

Diversification Opportunities for FREEPORT and NanoTech Gaming

0.0

Correlation Coefficient

FREEPORT  NanoTech Gaming

Pay attention - limited upside

The 3 months correlation between FREEPORT and NanoTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FREEPORT MCMORAN INC 4625 and NanoTech Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoTech Gaming and FREEPORT 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 FREEPORT MCMORAN INC 4625 are associated (or correlated) with NanoTech Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoTech Gaming has no effect on the direction of FREEPORT i.e., FREEPORT and NanoTech Gaming go up and down completely randomly.

Pair Corralation between FREEPORT and NanoTech Gaming

Assuming the 90 days trading horizon FREEPORT is expected to generate 194.35 times less return on investment than NanoTech Gaming. But when comparing it to its historical volatility, FREEPORT MCMORAN INC 4625 is 66.91 times less risky than NanoTech Gaming. It trades about 0.01 of its potential returns per unit of risk. NanoTech Gaming is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.03  in NanoTech Gaming on September 20, 2024 and sell it today you would lose (0.02) from holding NanoTech Gaming or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

FREEPORT MCMORAN INC 4625  vs.  NanoTech Gaming

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FREEPORT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

NanoTech Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with FREEPORT and NanoTech Gaming

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

The idea behind FREEPORT MCMORAN INC 4625 and NanoTech Gaming 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.