Correlation Between Analog Devices and Nano Labs
Can any of the company-specific risk be diversified away by investing in both Analog Devices 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 Analog Devices and Nano Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Nano Labs, you can compare the effects of market volatilities on Analog Devices 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 Analog Devices with a short position of Nano Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Nano Labs.
Diversification Opportunities for Analog Devices and Nano Labs
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Analog and Nano is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Nano Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Labs and Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Nano Labs go up and down completely randomly.
Pair Corralation between Analog Devices and Nano Labs
Considering the 90-day investment horizon Analog Devices is expected to under-perform the Nano Labs. But the stock apears to be less risky and, when comparing its historical volatility, Analog Devices is 17.5 times less risky than Nano Labs. The stock trades about -0.13 of its potential returns per unit of risk. The Nano Labs is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 593.00 in Nano Labs on August 24, 2024 and sell it today you would earn a total of 47.00 from holding Nano Labs or generate 7.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Nano Labs
Performance |
| Timeline |
| Analog Devices |
| Nano Labs |
Analog Devices and Nano Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Nano Labs
The main advantage of trading using opposite Analog Devices and Nano Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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.| Analog Devices vs. Eshallgo Class A | Analog Devices vs. Amtech Systems | Analog Devices vs. Gold Fields Ltd | Analog Devices vs. Aegean Airlines SA |
| Nano Labs vs. SEALSQ Corp | Nano Labs vs. GSI Technology | Nano Labs vs. SemiLEDS | Nano Labs vs. ChipMOS Technologies |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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