Correlation Between Naas Technology and ODP Corp
Can any of the company-specific risk be diversified away by investing in both Naas Technology and ODP Corp 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 Naas Technology and ODP Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naas Technology ADR and ODP Corp, you can compare the effects of market volatilities on Naas Technology and ODP Corp 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 Naas Technology with a short position of ODP Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naas Technology and ODP Corp.
Diversification Opportunities for Naas Technology and ODP Corp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Naas and ODP is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Naas Technology ADR and ODP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP Corp and Naas 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 Naas Technology ADR are associated (or correlated) with ODP Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP Corp has no effect on the direction of Naas Technology i.e., Naas Technology and ODP Corp go up and down completely randomly.
Pair Corralation between Naas Technology and ODP Corp
Given the investment horizon of 90 days Naas Technology ADR is expected to generate 1.57 times more return on investment than ODP Corp. However, Naas Technology is 1.57 times more volatile than ODP Corp. It trades about -0.02 of its potential returns per unit of risk. ODP Corp is currently generating about -0.32 per unit of risk. If you would invest 288.00 in Naas Technology ADR on September 4, 2024 and sell it today you would lose (14.00) from holding Naas Technology ADR or give up 4.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naas Technology ADR vs. ODP Corp
Performance |
| Timeline |
| Naas Technology ADR |
| ODP Corp |
Naas Technology and ODP Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naas Technology and ODP Corp
The main advantage of trading using opposite Naas Technology and ODP Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naas Technology position performs unexpectedly, ODP Corp 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 ODP Corp will offset losses from the drop in ODP Corp's long position.| Naas Technology vs. Leslies | Naas Technology vs. Sally Beauty Holdings | Naas Technology vs. ODP Corp | Naas Technology vs. 1 800 FLOWERSCOM |
| ODP Corp vs. Leslies | ODP Corp vs. Sally Beauty Holdings | ODP Corp vs. 1 800 FLOWERSCOM | ODP Corp vs. Caseys General Stores |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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