Correlation Between IBEX and Nayax
Can any of the company-specific risk be diversified away by investing in both IBEX and Nayax 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 IBEX and Nayax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX and Nayax, you can compare the effects of market volatilities on IBEX and Nayax 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 IBEX with a short position of Nayax. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX and Nayax.
Diversification Opportunities for IBEX and Nayax
Very weak diversification
The 3 months correlation between IBEX and Nayax is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding IBEX and Nayax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nayax and IBEX 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 IBEX are associated (or correlated) with Nayax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nayax has no effect on the direction of IBEX i.e., IBEX and Nayax go up and down completely randomly.
Pair Corralation between IBEX and Nayax
Given the investment horizon of 90 days IBEX is expected to generate 4.73 times less return on investment than Nayax. But when comparing it to its historical volatility, IBEX is 1.33 times less risky than Nayax. It trades about 0.02 of its potential returns per unit of risk. Nayax is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,908 in Nayax on August 28, 2024 and sell it today you would earn a total of 1,018 from holding Nayax or generate 53.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.22% |
| Values | Daily Returns |
IBEX vs. Nayax
Performance |
| Timeline |
| IBEX |
| Nayax |
IBEX and Nayax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBEX and Nayax
The main advantage of trading using opposite IBEX and Nayax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX position performs unexpectedly, Nayax 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 Nayax will offset losses from the drop in Nayax's long position.The idea behind IBEX and Nayax 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.| Nayax vs. The Hackett Group | Nayax vs. CSP Inc | Nayax vs. Formula Systems 1985 | Nayax vs. Information Services Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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