Correlation Between Now Corp and Amexdrug
Can any of the company-specific risk be diversified away by investing in both Now Corp and Amexdrug 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 Now Corp and Amexdrug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Corp and Amexdrug, you can compare the effects of market volatilities on Now Corp and Amexdrug 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 Now Corp with a short position of Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now Corp and Amexdrug.
Diversification Opportunities for Now Corp and Amexdrug
Pay attention - limited upside
The 3 months correlation between Now and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Now Corp and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug and Now Corp 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 Now Corp are associated (or correlated) with Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of Now Corp i.e., Now Corp and Amexdrug go up and down completely randomly.
Pair Corralation between Now Corp and Amexdrug
If you would invest 0.02 in Now Corp on August 29, 2024 and sell it today you would lose (0.01) from holding Now Corp or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Now Corp vs. Amexdrug
Performance |
| Timeline |
| Now Corp |
| Amexdrug |
Now Corp and Amexdrug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now Corp and Amexdrug
The main advantage of trading using opposite Now Corp and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now Corp position performs unexpectedly, Amexdrug 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 Amexdrug will offset losses from the drop in Amexdrug's long position.| Now Corp vs. Scepter Holdings | Now Corp vs. SponsorsOne | Now Corp vs. Vg Life Sciences | Now Corp vs. FDCTech |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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