Correlation Between NESNVX and Hawkins

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

By analyzing existing cross correlation between NESNVX 1 15 SEP 27 and Hawkins, you can compare the effects of market volatilities on NESNVX and Hawkins 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 NESNVX with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Hawkins.

Diversification Opportunities for NESNVX and Hawkins

0.13

Correlation Coefficient

NESNVX  Hawkins

Average diversification

The 3 months correlation between NESNVX and Hawkins is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 1 15 SEP 27 and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and NESNVX 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 NESNVX 1 15 SEP 27 are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of NESNVX i.e., NESNVX and Hawkins go up and down completely randomly.

Pair Corralation between NESNVX and Hawkins

Assuming the 90 days trading horizon NESNVX 1 15 SEP 27 is expected to under-perform the Hawkins. But the bond apears to be less risky and, when comparing its historical volatility, NESNVX 1 15 SEP 27 is 3.34 times less risky than Hawkins. The bond trades about -0.15 of its potential returns per unit of risk. The Hawkins is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  12,139  in Hawkins on October 23, 2024 and sell it today you would lose (707.00) from holding Hawkins or give up 5.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	61.67%
Values	Daily Returns

NESNVX 1 15 SEP 27  vs.  Hawkins

NESNVX 1 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 1 15 SEP 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NESNVX 1 15 SEP 27 investors.

Hawkins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawkins has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Hawkins is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NESNVX and Hawkins

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

The idea behind NESNVX 1 15 SEP 27 and Hawkins 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.