Correlation Between Protext Mobility and Nextmart
Can any of the company-specific risk be diversified away by investing in both Protext Mobility and Nextmart 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 Protext Mobility and Nextmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protext Mobility and Nextmart, you can compare the effects of market volatilities on Protext Mobility and Nextmart 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 Protext Mobility with a short position of Nextmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protext Mobility and Nextmart.
Diversification Opportunities for Protext Mobility and Nextmart
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Protext and Nextmart is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Protext Mobility and Nextmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextmart and Protext Mobility 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 Protext Mobility are associated (or correlated) with Nextmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextmart has no effect on the direction of Protext Mobility i.e., Protext Mobility and Nextmart go up and down completely randomly.
Pair Corralation between Protext Mobility and Nextmart
Given the investment horizon of 90 days Protext Mobility is expected to generate 173.57 times less return on investment than Nextmart. But when comparing it to its historical volatility, Protext Mobility is 10.3 times less risky than Nextmart. It trades about 0.01 of its potential returns per unit of risk. Nextmart is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Nextmart on October 11, 2024 and sell it today you would earn a total of 0.02 from holding Nextmart or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Protext Mobility vs. Nextmart
Performance |
| Timeline |
| Protext Mobility |
| Nextmart |
Protext Mobility and Nextmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protext Mobility and Nextmart
The main advantage of trading using opposite Protext Mobility and Nextmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protext Mobility position performs unexpectedly, Nextmart 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 Nextmart will offset losses from the drop in Nextmart's long position.| Protext Mobility vs. Living Cell Technologies | Protext Mobility vs. Multicell Techs | Protext Mobility vs. Institute of Biomedical | Protext Mobility vs. Health Sciences Gr |
| Nextmart vs. Genesis Electronics Group | Nextmart vs. Industrial Nanotech | Nextmart vs. Intl Star | Nextmart vs. HeadsUp Entertainment International |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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