Correlation Between Neo Performance and Nano One
Can any of the company-specific risk be diversified away by investing in both Neo Performance and Nano One 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 Neo Performance and Nano One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Performance Materials and Nano One Materials, you can compare the effects of market volatilities on Neo Performance and Nano One 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 Neo Performance with a short position of Nano One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Performance and Nano One.
Diversification Opportunities for Neo Performance and Nano One
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neo and Nano is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Neo Performance Materials and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials and Neo Performance 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 Neo Performance Materials are associated (or correlated) with Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Neo Performance i.e., Neo Performance and Nano One go up and down completely randomly.
Pair Corralation between Neo Performance and Nano One
Assuming the 90 days horizon Neo Performance Materials is expected to generate 0.55 times more return on investment than Nano One. However, Neo Performance Materials is 1.81 times less risky than Nano One. It trades about 0.03 of its potential returns per unit of risk. Nano One Materials is currently generating about -0.06 per unit of risk. If you would invest 525.00 in Neo Performance Materials on November 3, 2024 and sell it today you would earn a total of 73.00 from holding Neo Performance Materials or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Neo Performance Materials vs. Nano One Materials
Performance |
| Timeline |
| Neo Performance Materials |
| Nano One Materials |
Neo Performance and Nano One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Performance and Nano One
The main advantage of trading using opposite Neo Performance and Nano One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Performance position performs unexpectedly, Nano One 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 Nano One will offset losses from the drop in Nano One's long position.| Neo Performance vs. Mativ Holdings | Neo Performance vs. Sensient Technologies | Neo Performance vs. Koppers Holdings | Neo Performance vs. Axalta Coating Systems |
| Nano One vs. G6 Materials Corp | Nano One vs. Haydale Graphene Industries | Nano One vs. Orica Limited | Nano One vs. Johnson Matthey PLC |
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.
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