Correlation Between Granite 3x and Novatech Industries
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Novatech Industries 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 Granite 3x and Novatech Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Novatech Industries SA, you can compare the effects of market volatilities on Granite 3x and Novatech Industries 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 Granite 3x with a short position of Novatech Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Novatech Industries.
Diversification Opportunities for Granite 3x and Novatech Industries
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Novatech is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Novatech Industries SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novatech Industries and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Novatech Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novatech Industries has no effect on the direction of Granite 3x i.e., Granite 3x and Novatech Industries go up and down completely randomly.
Pair Corralation between Granite 3x and Novatech Industries
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Novatech Industries. But the etf apears to be less risky and, when comparing its historical volatility, Granite 3x LVMH is 1.06 times less risky than Novatech Industries. The etf trades about -0.07 of its potential returns per unit of risk. The Novatech Industries SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 885.00 in Novatech Industries SA on August 28, 2024 and sell it today you would earn a total of 165.00 from holding Novatech Industries SA or generate 18.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 70.39% |
| Values | Daily Returns |
Granite 3x LVMH vs. Novatech Industries SA
Performance |
| Timeline |
| Granite 3x LVMH |
| Novatech Industries |
Granite 3x and Novatech Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Novatech Industries
The main advantage of trading using opposite Granite 3x and Novatech Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Novatech Industries 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 Novatech Industries will offset losses from the drop in Novatech Industries' long position.| Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Japan | Granite 3x vs. Lyxor UCITS Stoxx | Granite 3x vs. Amundi CAC 40 |
| Novatech Industries vs. Axway Software | Novatech Industries vs. Netmedia Group SA | Novatech Industries vs. Gaztransport Technigaz SAS | Novatech Industries vs. Soditech SA |
Check out your portfolio center.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..
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