Correlation Between Nutanix and Powerstorm Holdings
Can any of the company-specific risk be diversified away by investing in both Nutanix and Powerstorm Holdings 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 Powerstorm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nutanix and Powerstorm Holdings, you can compare the effects of market volatilities on Nutanix and Powerstorm Holdings 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 Powerstorm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutanix and Powerstorm Holdings.
Diversification Opportunities for Nutanix and Powerstorm Holdings
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nutanix and Powerstorm is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Powerstorm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerstorm Holdings 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 Powerstorm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerstorm Holdings has no effect on the direction of Nutanix i.e., Nutanix and Powerstorm Holdings go up and down completely randomly.
Pair Corralation between Nutanix and Powerstorm Holdings
Given the investment horizon of 90 days Nutanix is expected to generate 0.26 times more return on investment than Powerstorm Holdings. However, Nutanix is 3.85 times less risky than Powerstorm Holdings. It trades about 0.1 of its potential returns per unit of risk. Powerstorm Holdings is currently generating about -0.25 per unit of risk. If you would invest 6,210 in Nutanix on September 1, 2024 and sell it today you would earn a total of 318.00 from holding Nutanix or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nutanix vs. Powerstorm Holdings
Performance |
| Timeline |
| Nutanix |
| Powerstorm Holdings |
Nutanix and Powerstorm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nutanix and Powerstorm Holdings
The main advantage of trading using opposite Nutanix and Powerstorm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutanix position performs unexpectedly, Powerstorm Holdings 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 Powerstorm Holdings will offset losses from the drop in Powerstorm Holdings' long position.| Nutanix vs. Palo Alto Networks | Nutanix vs. GigaCloud Technology Class | Nutanix vs. Pagaya Technologies | Nutanix vs. Telos Corp |
| Powerstorm Holdings vs. Solid Power | Powerstorm Holdings vs. Plug Power | Powerstorm Holdings vs. FREYR Battery SA | Powerstorm Holdings vs. FuelCell Energy |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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