Correlation Between NEXA RESOURCES and Rock Tech
Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and Rock Tech 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 NEXA RESOURCES and Rock Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXA RESOURCES SA and Rock Tech Lithium, you can compare the effects of market volatilities on NEXA RESOURCES and Rock Tech 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 NEXA RESOURCES with a short position of Rock Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and Rock Tech.
Diversification Opportunities for NEXA RESOURCES and Rock Tech
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXA and Rock is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and Rock Tech Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rock Tech Lithium and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with Rock Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rock Tech Lithium has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and Rock Tech go up and down completely randomly.
Pair Corralation between NEXA RESOURCES and Rock Tech
Assuming the 90 days horizon NEXA RESOURCES SA is expected to under-perform the Rock Tech. But the stock apears to be less risky and, when comparing its historical volatility, NEXA RESOURCES SA is 2.18 times less risky than Rock Tech. The stock trades about 0.0 of its potential returns per unit of risk. The Rock Tech Lithium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Rock Tech Lithium on November 9, 2024 and sell it today you would lose (11.00) from holding Rock Tech Lithium or give up 12.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXA RESOURCES SA vs. Rock Tech Lithium
Performance |
| Timeline |
| NEXA RESOURCES SA |
| Rock Tech Lithium |
NEXA RESOURCES and Rock Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXA RESOURCES and Rock Tech
The main advantage of trading using opposite NEXA RESOURCES and Rock Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES position performs unexpectedly, Rock Tech 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 Rock Tech will offset losses from the drop in Rock Tech's long position.| NEXA RESOURCES vs. Marie Brizard Wine | NEXA RESOURCES vs. Treasury Wine Estates | NEXA RESOURCES vs. Universal Health Realty | NEXA RESOURCES vs. COREBRIDGE FINANCIAL INC |
| Rock Tech vs. SCANSOURCE | Rock Tech vs. PARKEN Sport Entertainment | Rock Tech vs. TOMBADOR IRON LTD | Rock Tech vs. MOUNT GIBSON IRON |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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