Correlation Between Nutanix and Galp Energia
Can any of the company-specific risk be diversified away by investing in both Nutanix and Galp Energia 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 Nutanix and Galp Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nutanix and Galp Energia SGPS, you can compare the effects of market volatilities on Nutanix and Galp Energia 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 Nutanix with a short position of Galp Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutanix and Galp Energia.
Diversification Opportunities for Nutanix and Galp Energia
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nutanix and Galp is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Galp Energia SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galp Energia SGPS and Nutanix 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 Nutanix are associated (or correlated) with Galp Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galp Energia SGPS has no effect on the direction of Nutanix i.e., Nutanix and Galp Energia go up and down completely randomly.
Pair Corralation between Nutanix and Galp Energia
Given the investment horizon of 90 days Nutanix is expected to generate 0.97 times more return on investment than Galp Energia. However, Nutanix is 1.03 times less risky than Galp Energia. It trades about 0.08 of its potential returns per unit of risk. Galp Energia SGPS is currently generating about -0.15 per unit of risk. If you would invest 6,412 in Nutanix on August 31, 2024 and sell it today you would earn a total of 258.00 from holding Nutanix or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nutanix vs. Galp Energia SGPS
Performance |
| Timeline |
| Nutanix |
| Galp Energia SGPS |
Nutanix and Galp Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nutanix and Galp Energia
The main advantage of trading using opposite Nutanix and Galp Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutanix position performs unexpectedly, Galp Energia 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 Galp Energia will offset losses from the drop in Galp Energia's long position.| Nutanix vs. Aquagold International | Nutanix vs. Thrivent High Yield | Nutanix vs. Morningstar Unconstrained Allocation | Nutanix vs. Via Renewables |
| Galp Energia vs. Equinor ASA ADR | Galp Energia vs. TotalEnergies SE ADR | Galp Energia vs. Ecopetrol SA ADR | Galp Energia vs. National Fuel Gas |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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