Correlation Between Nexxen International and Steel Connect
Can any of the company-specific risk be diversified away by investing in both Nexxen International and Steel Connect 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 Nexxen International and Steel Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexxen International and Steel Connect, you can compare the effects of market volatilities on Nexxen International and Steel Connect 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 Nexxen International with a short position of Steel Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexxen International and Steel Connect.
Diversification Opportunities for Nexxen International and Steel Connect
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nexxen and Steel is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nexxen International and Steel Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Connect and Nexxen International 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 Nexxen International are associated (or correlated) with Steel Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Connect has no effect on the direction of Nexxen International i.e., Nexxen International and Steel Connect go up and down completely randomly.
Pair Corralation between Nexxen International and Steel Connect
Given the investment horizon of 90 days Nexxen International is expected to generate 1.83 times more return on investment than Steel Connect. However, Nexxen International is 1.83 times more volatile than Steel Connect. It trades about 0.2 of its potential returns per unit of risk. Steel Connect is currently generating about 0.02 per unit of risk. If you would invest 800.00 in Nexxen International on August 24, 2024 and sell it today you would earn a total of 191.00 from holding Nexxen International or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexxen International vs. Steel Connect
Performance |
| Timeline |
| Nexxen International |
| Steel Connect |
Nexxen International and Steel Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexxen International and Steel Connect
The main advantage of trading using opposite Nexxen International and Steel Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexxen International position performs unexpectedly, Steel Connect 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 Steel Connect will offset losses from the drop in Steel Connect's long position.| Nexxen International vs. National Vision Holdings | Nexxen International vs. SunOpta | Nexxen International vs. Coupang LLC | Nexxen International vs. Lululemon Athletica |
| Steel Connect vs. Baosheng Media Group | Steel Connect vs. Impact Fusion International | Steel Connect vs. Mirriad Advertising plc | Steel Connect vs. CyberAgent ADR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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