Correlation Between Nelnet and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both Nelnet and Foreign Trade 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 Nelnet and Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nelnet Inc and Foreign Trade Bank, you can compare the effects of market volatilities on Nelnet and Foreign Trade 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 Nelnet with a short position of Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nelnet and Foreign Trade.
Diversification Opportunities for Nelnet and Foreign Trade
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nelnet and Foreign is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nelnet Inc and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank and Nelnet 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 Nelnet Inc are associated (or correlated) with Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Nelnet i.e., Nelnet and Foreign Trade go up and down completely randomly.
Pair Corralation between Nelnet and Foreign Trade
Considering the 90-day investment horizon Nelnet is expected to generate 4.24 times less return on investment than Foreign Trade. But when comparing it to its historical volatility, Nelnet Inc is 1.22 times less risky than Foreign Trade. It trades about 0.03 of its potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Foreign Trade Bank on September 22, 2024 and sell it today you would earn a total of 2,160 from holding Foreign Trade Bank or generate 149.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nelnet Inc vs. Foreign Trade Bank
Performance |
| Timeline |
| Nelnet Inc |
| Foreign Trade Bank |
Nelnet and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nelnet and Foreign Trade
The main advantage of trading using opposite Nelnet and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nelnet position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade's long position.| Nelnet vs. SLM Corp Pb | Nelnet vs. FirstCash | Nelnet vs. Federal Agricultural Mortgage | Nelnet vs. Navient Corp |
| Foreign Trade vs. Banco Santander Chile | Foreign Trade vs. Bancolombia SA ADR | Foreign Trade vs. Banco Bradesco SA | Foreign Trade vs. Credicorp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |