Correlation Between Nutanix and Stem
Can any of the company-specific risk be diversified away by investing in both Nutanix and Stem 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 Stem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nutanix and Stem Inc, you can compare the effects of market volatilities on Nutanix and Stem 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 Stem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutanix and Stem.
Diversification Opportunities for Nutanix and Stem
Very good diversification
The 3 months correlation between Nutanix and Stem is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Stem Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stem Inc 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 Stem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stem Inc has no effect on the direction of Nutanix i.e., Nutanix and Stem go up and down completely randomly.
Pair Corralation between Nutanix and Stem
Given the investment horizon of 90 days Nutanix is expected to generate 0.15 times more return on investment than Stem. However, Nutanix is 6.66 times less risky than Stem. It trades about 0.23 of its potential returns per unit of risk. Stem Inc is currently generating about 0.0 per unit of risk. If you would invest 6,128 in Nutanix on November 3, 2024 and sell it today you would earn a total of 749.00 from holding Nutanix or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nutanix vs. Stem Inc
Performance |
| Timeline |
| Nutanix |
| Stem Inc |
Nutanix and Stem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nutanix and Stem
The main advantage of trading using opposite Nutanix and Stem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutanix position performs unexpectedly, Stem 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 Stem will offset losses from the drop in Stem's long position.| Nutanix vs. Palo Alto Networks | Nutanix vs. Uipath Inc | Nutanix vs. Zscaler | Nutanix vs. Crowdstrike Holdings |
| Stem vs. Palo Alto Networks | Stem vs. Crowdstrike Holdings | Stem vs. Cloudflare | Stem vs. Palantir Technologies Class |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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