Correlation Between Nel ASA and Nuscale Power
Can any of the company-specific risk be diversified away by investing in both Nel ASA and Nuscale Power 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 Nel ASA and Nuscale Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nel ASA and Nuscale Power Corp, you can compare the effects of market volatilities on Nel ASA and Nuscale Power 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 Nel ASA with a short position of Nuscale Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and Nuscale Power.
Diversification Opportunities for Nel ASA and Nuscale Power
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nel and Nuscale is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and Nuscale Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuscale Power Corp and Nel ASA 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 Nel ASA are associated (or correlated) with Nuscale Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuscale Power Corp has no effect on the direction of Nel ASA i.e., Nel ASA and Nuscale Power go up and down completely randomly.
Pair Corralation between Nel ASA and Nuscale Power
Assuming the 90 days horizon Nel ASA is expected to under-perform the Nuscale Power. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nel ASA is 1.46 times less risky than Nuscale Power. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Nuscale Power Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 948.00 in Nuscale Power Corp on August 24, 2024 and sell it today you would earn a total of 1,819 from holding Nuscale Power Corp or generate 191.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nel ASA vs. Nuscale Power Corp
Performance |
| Timeline |
| Nel ASA |
| Nuscale Power Corp |
Nel ASA and Nuscale Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nel ASA and Nuscale Power
The main advantage of trading using opposite Nel ASA and Nuscale Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nel ASA position performs unexpectedly, Nuscale Power 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 Nuscale Power will offset losses from the drop in Nuscale Power's long position.The idea behind Nel ASA and Nuscale Power Corp 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.| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |