Correlation Between Stock Exchange and NEX POINT
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and NEX POINT 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 Stock Exchange and NEX POINT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and NEX POINT, you can compare the effects of market volatilities on Stock Exchange and NEX POINT 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 Stock Exchange with a short position of NEX POINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and NEX POINT.
Diversification Opportunities for Stock Exchange and NEX POINT
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stock and NEX is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and NEX POINT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEX POINT and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with NEX POINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEX POINT has no effect on the direction of Stock Exchange i.e., Stock Exchange and NEX POINT go up and down completely randomly.
Pair Corralation between Stock Exchange and NEX POINT
Assuming the 90 days trading horizon Stock Exchange Of is expected to generate 0.06 times more return on investment than NEX POINT. However, Stock Exchange Of is 17.58 times less risky than NEX POINT. It trades about -0.14 of its potential returns per unit of risk. NEX POINT is currently generating about -0.31 per unit of risk. If you would invest 137,753 in Stock Exchange Of on October 20, 2024 and sell it today you would lose (3,690) from holding Stock Exchange Of or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. NEX POINT
Performance |
| Timeline |
Stock Exchange and NEX POINT Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
NEX POINT
Pair trading matchups for NEX POINT
Pair Trading with Stock Exchange and NEX POINT
The main advantage of trading using opposite Stock Exchange and NEX POINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, NEX POINT 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 NEX POINT will offset losses from the drop in NEX POINT's long position.| Stock Exchange vs. Taokaenoi Food Marketing | Stock Exchange vs. JD Food PCL | Stock Exchange vs. CHUWIT FARM PUBLIC | Stock Exchange vs. Siamgas and Petrochemicals |
| NEX POINT vs. Peerapat Technology Public | NEX POINT vs. Asia Metal Public | NEX POINT vs. Bangkok Sheet Metal | NEX POINT vs. Siamgas and Petrochemicals |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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