Correlation Between Nolato AB and New Wave
Can any of the company-specific risk be diversified away by investing in both Nolato AB and New Wave 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 Nolato AB and New Wave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nolato AB and New Wave Group, you can compare the effects of market volatilities on Nolato AB and New Wave 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 Nolato AB with a short position of New Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nolato AB and New Wave.
Diversification Opportunities for Nolato AB and New Wave
Average diversification
The 3 months correlation between Nolato and New is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nolato AB and New Wave Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Wave Group and Nolato AB 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 Nolato AB are associated (or correlated) with New Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Wave Group has no effect on the direction of Nolato AB i.e., Nolato AB and New Wave go up and down completely randomly.
Pair Corralation between Nolato AB and New Wave
Assuming the 90 days trading horizon Nolato AB is expected to generate 1.82 times less return on investment than New Wave. But when comparing it to its historical volatility, Nolato AB is 1.15 times less risky than New Wave. It trades about 0.01 of its potential returns per unit of risk. New Wave Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,871 in New Wave Group on August 31, 2024 and sell it today you would earn a total of 804.00 from holding New Wave Group or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nolato AB vs. New Wave Group
Performance |
| Timeline |
| Nolato AB |
| New Wave Group |
Nolato AB and New Wave Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nolato AB and New Wave
The main advantage of trading using opposite Nolato AB and New Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nolato AB position performs unexpectedly, New Wave 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 New Wave will offset losses from the drop in New Wave's long position.| Nolato AB vs. SaltX Technology Holding | Nolato AB vs. Acconeer AB | Nolato AB vs. GomSpace Group AB | Nolato AB vs. KABE Group AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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