Correlation Between Nano One and Eguana Technologies
Can any of the company-specific risk be diversified away by investing in both Nano One and Eguana Technologies 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 One and Eguana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano One Materials and Eguana Technologies, you can compare the effects of market volatilities on Nano One and Eguana Technologies 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 One with a short position of Eguana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano One and Eguana Technologies.
Diversification Opportunities for Nano One and Eguana Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nano and Eguana is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nano One Materials and Eguana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eguana Technologies and Nano One 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 One Materials are associated (or correlated) with Eguana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eguana Technologies has no effect on the direction of Nano One i.e., Nano One and Eguana Technologies go up and down completely randomly.
Pair Corralation between Nano One and Eguana Technologies
Assuming the 90 days horizon Nano One Materials is expected to under-perform the Eguana Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nano One Materials is 5.82 times less risky than Eguana Technologies. The pink sheet trades about -0.27 of its potential returns per unit of risk. The Eguana Technologies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 0.45 in Eguana Technologies on September 1, 2024 and sell it today you would earn a total of 0.44 from holding Eguana Technologies or generate 97.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nano One Materials vs. Eguana Technologies
Performance |
| Timeline |
| Nano One Materials |
| Eguana Technologies |
Nano One and Eguana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nano One and Eguana Technologies
The main advantage of trading using opposite Nano One and Eguana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano One position performs unexpectedly, Eguana Technologies 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 Eguana Technologies will offset losses from the drop in Eguana Technologies' long position.| Nano One vs. G6 Materials Corp | Nano One vs. Haydale Graphene Industries | Nano One vs. Orica Limited | Nano One vs. Johnson Matthey PLC |
| Eguana Technologies vs. Advanced Energy Industries | Eguana Technologies vs. Hubbell | Eguana Technologies vs. Tantalus Systems Holding | Eguana Technologies vs. Legrand SA 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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