Correlation Between Nova Technology and Onyx Healthcare
Can any of the company-specific risk be diversified away by investing in both Nova Technology and Onyx Healthcare 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 Nova Technology and Onyx Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Technology and Onyx Healthcare, you can compare the effects of market volatilities on Nova Technology and Onyx Healthcare 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 Nova Technology with a short position of Onyx Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Technology and Onyx Healthcare.
Diversification Opportunities for Nova Technology and Onyx Healthcare
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nova and Onyx is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nova Technology and Onyx Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Healthcare and Nova Technology 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 Nova Technology are associated (or correlated) with Onyx Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Healthcare has no effect on the direction of Nova Technology i.e., Nova Technology and Onyx Healthcare go up and down completely randomly.
Pair Corralation between Nova Technology and Onyx Healthcare
Assuming the 90 days trading horizon Nova Technology is expected to generate 0.81 times more return on investment than Onyx Healthcare. However, Nova Technology is 1.23 times less risky than Onyx Healthcare. It trades about 0.14 of its potential returns per unit of risk. Onyx Healthcare is currently generating about 0.01 per unit of risk. If you would invest 11,665 in Nova Technology on October 25, 2024 and sell it today you would earn a total of 14,335 from holding Nova Technology or generate 122.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Technology vs. Onyx Healthcare
Performance |
| Timeline |
| Nova Technology |
| Onyx Healthcare |
Nova Technology and Onyx Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Technology and Onyx Healthcare
The main advantage of trading using opposite Nova Technology and Onyx Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Technology position performs unexpectedly, Onyx Healthcare 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 Onyx Healthcare will offset losses from the drop in Onyx Healthcare's long position.| Nova Technology vs. Acter Co | Nova Technology vs. Chicony Electronics Co | Nova Technology vs. Elite Material Co | Nova Technology vs. Chipbond Technology |
| Onyx Healthcare vs. Sports Gear Co | Onyx Healthcare vs. eCloudvalley Digital Technology | Onyx Healthcare vs. Nova Technology | Onyx Healthcare vs. Posiflex Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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