Correlation Between NESNVX and Getty Copper

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

By analyzing existing cross correlation between NESNVX 125 15 SEP 30 and Getty Copper, you can compare the effects of market volatilities on NESNVX and Getty Copper 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 Getty Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Getty Copper.

Diversification Opportunities for NESNVX and Getty Copper

0.0

Correlation Coefficient

NESNVX  Getty Copper

Pay attention - limited upside

The 3 months correlation between NESNVX and Getty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 125 15 SEP 30 and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper 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 125 15 SEP 30 are associated (or correlated) with Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of NESNVX i.e., NESNVX and Getty Copper go up and down completely randomly.

Pair Corralation between NESNVX and Getty Copper

Assuming the 90 days trading horizon NESNVX 125 15 SEP 30 is expected to under-perform the Getty Copper. But the bond apears to be less risky and, when comparing its historical volatility, NESNVX 125 15 SEP 30 is 11.93 times less risky than Getty Copper. The bond trades about -0.04 of its potential returns per unit of risk. The Getty Copper is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Getty Copper on September 25, 2024 and sell it today you would earn a total of  2.38  from holding Getty Copper or generate 95.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

NESNVX 125 15 SEP 30  vs.  Getty Copper

NESNVX 125 15

Risk-Adjusted Performance

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Very Weak

Over the last 90 days NESNVX 125 15 SEP 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat 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 NESNVX 125 15 SEP 30 investors.

Getty Copper

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Getty Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Getty Copper is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NESNVX and Getty Copper

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

The idea behind NESNVX 125 15 SEP 30 and Getty Copper 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..