Correlation Between NuGene International and American Leisure
Can any of the company-specific risk be diversified away by investing in both NuGene International and American Leisure 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 NuGene International and American Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuGene International and American Leisure Holdings, you can compare the effects of market volatilities on NuGene International and American Leisure 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 NuGene International with a short position of American Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuGene International and American Leisure.
Diversification Opportunities for NuGene International and American Leisure
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NuGene and American is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NuGene International and American Leisure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Leisure Holdings and NuGene International 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 NuGene International are associated (or correlated) with American Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Leisure Holdings has no effect on the direction of NuGene International i.e., NuGene International and American Leisure go up and down completely randomly.
Pair Corralation between NuGene International and American Leisure
Given the investment horizon of 90 days NuGene International is expected to generate 107.5 times less return on investment than American Leisure. But when comparing it to its historical volatility, NuGene International is 3.06 times less risky than American Leisure. It trades about 0.0 of its potential returns per unit of risk. American Leisure Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.05 in American Leisure Holdings on August 24, 2024 and sell it today you would lose (0.03) from holding American Leisure Holdings or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NuGene International vs. American Leisure Holdings
Performance |
| Timeline |
| NuGene International |
| American Leisure Holdings |
NuGene International and American Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuGene International and American Leisure
The main advantage of trading using opposite NuGene International and American Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuGene International position performs unexpectedly, American Leisure 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 American Leisure will offset losses from the drop in American Leisure's long position.| NuGene International vs. American Leisure Holdings | NuGene International vs. Absolute Health and | NuGene International vs. Supurva Healthcare Group | NuGene International vs. China Health Management |
| American Leisure vs. Absolute Health and | American Leisure vs. Supurva Healthcare Group | American Leisure vs. China Health Management | American Leisure vs. Embrace Change Acquisition |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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