Correlation Between Nova and Safe T
Can any of the company-specific risk be diversified away by investing in both Nova and Safe T 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 Nova and Safe T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova and Safe T Group, you can compare the effects of market volatilities on Nova and Safe T 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 Nova with a short position of Safe T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova and Safe T.
Diversification Opportunities for Nova and Safe T
Very good diversification
The 3 months correlation between Nova and Safe is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nova and Safe T Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe T Group and Nova 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 Nova are associated (or correlated) with Safe T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe T Group has no effect on the direction of Nova i.e., Nova and Safe T go up and down completely randomly.
Pair Corralation between Nova and Safe T
Assuming the 90 days trading horizon Nova is expected to generate 0.81 times more return on investment than Safe T. However, Nova is 1.24 times less risky than Safe T. It trades about 0.51 of its potential returns per unit of risk. Safe T Group is currently generating about -0.16 per unit of risk. If you would invest 7,136,000 in Nova on October 23, 2024 and sell it today you would earn a total of 1,814,000 from holding Nova or generate 25.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova vs. Safe T Group
Performance |
| Timeline |
| Nova |
| Safe T Group |
Nova and Safe T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova and Safe T
The main advantage of trading using opposite Nova and Safe T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova position performs unexpectedly, Safe T 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 Safe T will offset losses from the drop in Safe T's long position.The idea behind Nova and Safe T Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Safe T vs. Iargento Hi Tech | Safe T vs. Altshuler Shaham Financial | Safe T vs. Scope Metals Group | Safe T vs. Payment Financial Technologies |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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