Correlation Between Nacon Sa and Solutions

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Can any of the company-specific risk be diversified away by investing in both Nacon Sa and Solutions 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 Nacon Sa and Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nacon Sa and Solutions 30 SE, you can compare the effects of market volatilities on Nacon Sa and Solutions 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 Nacon Sa with a short position of Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nacon Sa and Solutions.

Diversification Opportunities for Nacon Sa and Solutions

NaconSolutionsDiversified AwayNaconSolutionsDiversified Away100%
-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Nacon and Solutions is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nacon Sa and Solutions 30 SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solutions 30 SE and Nacon Sa 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 Nacon Sa are associated (or correlated) with Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solutions 30 SE has no effect on the direction of Nacon Sa i.e., Nacon Sa and Solutions go up and down completely randomly.

Pair Corralation between Nacon Sa and Solutions

Assuming the 90 days trading horizon Nacon Sa is expected to under-perform the Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Nacon Sa is 1.57 times less risky than Solutions. The stock trades about -0.02 of its potential returns per unit of risk. The Solutions 30 SE is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  98.00  in Solutions 30 SE on November 30, 2024 and sell it today you would earn a total of  35.00  from holding Solutions 30 SE or generate 35.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nacon Sa  vs.  Solutions 30 SE

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0204060
JavaScript chart by amCharts 3.21.15NACON S30
       Timeline  
Nacon Sa 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nacon Sa are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nacon Sa reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFeb0.450.50.550.60.650.70.75
Solutions 30 SE 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Solutions 30 SE are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Solutions sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFeb0.80.911.11.21.31.41.5

Nacon Sa and Solutions Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-14.25-10.67-7.1-3.520.05963.557.2210.8914.5618.22 0.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15NACON S30
       Returns  

Pair Trading with Nacon Sa and Solutions

The main advantage of trading using opposite Nacon Sa and Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nacon Sa position performs unexpectedly, Solutions 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 Solutions will offset losses from the drop in Solutions' long position.
The idea behind Nacon Sa and Solutions 30 SE 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.
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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