Correlation Between Nano Nuclear and Xylem
Can any of the company-specific risk be diversified away by investing in both Nano Nuclear and Xylem 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 Nano Nuclear and Xylem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano Nuclear Energy and Xylem Inc, you can compare the effects of market volatilities on Nano Nuclear and Xylem 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 Nano Nuclear with a short position of Xylem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Nuclear and Xylem.
Diversification Opportunities for Nano Nuclear and Xylem
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nano and Xylem is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nano Nuclear Energy and Xylem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xylem Inc and Nano Nuclear 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 Nano Nuclear Energy are associated (or correlated) with Xylem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xylem Inc has no effect on the direction of Nano Nuclear i.e., Nano Nuclear and Xylem go up and down completely randomly.
Pair Corralation between Nano Nuclear and Xylem
Considering the 90-day investment horizon Nano Nuclear Energy is expected to generate 8.27 times more return on investment than Xylem. However, Nano Nuclear is 8.27 times more volatile than Xylem Inc. It trades about 0.11 of its potential returns per unit of risk. Xylem Inc is currently generating about 0.02 per unit of risk. If you would invest 519.00 in Nano Nuclear Energy on January 10, 2025 and sell it today you would earn a total of 1,756 from holding Nano Nuclear Energy or generate 338.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 56.31% |
| Values | Daily Returns |
Nano Nuclear Energy vs. Xylem Inc
Performance |
| Timeline |
| Nano Nuclear Energy |
| Xylem Inc |
Nano Nuclear and Xylem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nano Nuclear and Xylem
The main advantage of trading using opposite Nano Nuclear and Xylem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano Nuclear position performs unexpectedly, Xylem 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 Xylem will offset losses from the drop in Xylem's long position.| Nano Nuclear vs. Chart Industries | Nano Nuclear vs. Nordson | Nano Nuclear vs. Helios Technologies | Nano Nuclear vs. Thermon Group Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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