Correlation Between NN and Nextracker
Can any of the company-specific risk be diversified away by investing in both NN and Nextracker 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 NN and Nextracker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Inc and Nextracker Class A, you can compare the effects of market volatilities on NN and Nextracker 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 NN with a short position of Nextracker. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN and Nextracker.
Diversification Opportunities for NN and Nextracker
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NN and Nextracker is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NN Inc and Nextracker Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextracker Class A and NN 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 NN Inc are associated (or correlated) with Nextracker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextracker Class A has no effect on the direction of NN i.e., NN and Nextracker go up and down completely randomly.
Pair Corralation between NN and Nextracker
Given the investment horizon of 90 days NN Inc is expected to under-perform the Nextracker. In addition to that, NN is 1.75 times more volatile than Nextracker Class A. It trades about -0.31 of its total potential returns per unit of risk. Nextracker Class A is currently generating about 0.44 per unit of volatility. If you would invest 3,429 in Nextracker Class A on October 20, 2024 and sell it today you would earn a total of 987.00 from holding Nextracker Class A or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
NN Inc vs. Nextracker Class A
Performance |
| Timeline |
| NN Inc |
| Nextracker Class A |
NN and Nextracker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN and Nextracker
The main advantage of trading using opposite NN and Nextracker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN position performs unexpectedly, Nextracker 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 Nextracker will offset losses from the drop in Nextracker's long position.| NN vs. Steel Partners Holdings | NN vs. Compass Diversified | NN vs. Brookfield Business Partners | NN vs. Matthews International |
| Nextracker vs. Custom Truck One | Nextracker vs. Vestis | Nextracker vs. FDG Electric Vehicles | Nextracker vs. Lendlease Global Commercial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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