Correlation Between Global Lights and NOVA VISION
Can any of the company-specific risk be diversified away by investing in both Global Lights and NOVA VISION 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 Global Lights and NOVA VISION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Lights Acquisition and NOVA VISION ACQUISITION, you can compare the effects of market volatilities on Global Lights and NOVA VISION 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 Global Lights with a short position of NOVA VISION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Lights and NOVA VISION.
Diversification Opportunities for Global Lights and NOVA VISION
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and NOVA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Lights Acquisition and NOVA VISION ACQUISITION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVA VISION ACQUISITION and Global Lights 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 Global Lights Acquisition are associated (or correlated) with NOVA VISION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVA VISION ACQUISITION has no effect on the direction of Global Lights i.e., Global Lights and NOVA VISION go up and down completely randomly.
Pair Corralation between Global Lights and NOVA VISION
If you would invest 3,700 in NOVA VISION ACQUISITION on October 25, 2024 and sell it today you would earn a total of 0.00 from holding NOVA VISION ACQUISITION or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Global Lights Acquisition vs. NOVA VISION ACQUISITION
Performance |
| Timeline |
| Global Lights Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| NOVA VISION ACQUISITION |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Lights and NOVA VISION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Lights and NOVA VISION
The main advantage of trading using opposite Global Lights and NOVA VISION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Lights position performs unexpectedly, NOVA VISION 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 NOVA VISION will offset losses from the drop in NOVA VISION's long position.| Global Lights vs. Albertsons Companies | Global Lights vs. MYT Netherlands Parent | Global Lights vs. Asbury Automotive Group | Global Lights vs. Tradeshow Marketing |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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