Correlation Between Wisekey International and Nano Labs

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

By analyzing existing cross correlation between Wisekey International Holding and Nano Labs, you can compare the effects of market volatilities on Wisekey International and Nano Labs 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 Wisekey International with a short position of Nano Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and Nano Labs.

Diversification Opportunities for Wisekey International and Nano Labs

0.81

Correlation Coefficient

Wisekey International  Nano Labs

Very poor diversification

The 3 months correlation between Wisekey and Nano is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and Nano Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Labs and Wisekey International 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 Wisekey International Holding are associated (or correlated) with Nano Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Labs has no effect on the direction of Wisekey International i.e., Wisekey International and Nano Labs go up and down completely randomly.

Pair Corralation between Wisekey International and Nano Labs

Given the investment horizon of 90 days Wisekey International Holding is expected to under-perform the Nano Labs. In addition to that, Wisekey International is 1.81 times more volatile than Nano Labs. It trades about -0.08 of its total potential returns per unit of risk. Nano Labs is currently generating about -0.09 per unit of volatility. If you would invest  775.00  in Nano Labs on December 27, 2024 and sell it today you would lose (288.00) from holding Nano Labs or give up 37.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Wisekey International Holding  vs.  Nano Labs

Wisekey International

Risk-Adjusted Performance

Very Weak

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

Nano Labs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano Labs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Wisekey International and Nano Labs

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

The idea behind Wisekey International Holding and Nano Labs 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.