Correlation Between Nuscale Power and Graham
Can any of the company-specific risk be diversified away by investing in both Nuscale Power and Graham 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 Nuscale Power and Graham into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuscale Power Corp and Graham, you can compare the effects of market volatilities on Nuscale Power and Graham 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 Nuscale Power with a short position of Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuscale Power and Graham.
Diversification Opportunities for Nuscale Power and Graham
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuscale and Graham is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nuscale Power Corp and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham and Nuscale Power 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 Nuscale Power Corp are associated (or correlated) with Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of Nuscale Power i.e., Nuscale Power and Graham go up and down completely randomly.
Pair Corralation between Nuscale Power and Graham
Considering the 90-day investment horizon Nuscale Power Corp is expected to generate 1.19 times more return on investment than Graham. However, Nuscale Power is 1.19 times more volatile than Graham. It trades about -0.26 of its potential returns per unit of risk. Graham is currently generating about -0.32 per unit of risk. If you would invest 2,358 in Nuscale Power Corp on December 1, 2024 and sell it today you would lose (639.00) from holding Nuscale Power Corp or give up 27.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuscale Power Corp vs. Graham
Performance |
| Timeline |
| Nuscale Power Corp |
| Graham |
Nuscale Power and Graham Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuscale Power and Graham
The main advantage of trading using opposite Nuscale Power and Graham positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuscale Power position performs unexpectedly, Graham 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 Graham will offset losses from the drop in Graham's long position.| Nuscale Power vs. Cummins | Nuscale Power vs. Chart Industries | Nuscale Power vs. GE Aerospace | Nuscale Power vs. Nel ASA |
| Graham vs. Luxfer Holdings PLC | Graham vs. Enerpac Tool Group | Graham vs. Kadant Inc | Graham vs. Omega Flex |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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