Correlation Between 5I5j Holding and NBTM New

Can any of the company-specific risk be diversified away by investing in both 5I5j Holding and NBTM New 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 5I5j Holding and NBTM New into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 5I5j Holding Group and NBTM New Materials, you can compare the effects of market volatilities on 5I5j Holding and NBTM New 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 5I5j Holding with a short position of NBTM New. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5I5j Holding and NBTM New.

Diversification Opportunities for 5I5j Holding and NBTM New

0.7

Correlation Coefficient

5I5j Holding  NBTM New

Poor diversification

The 3 months correlation between 5I5j and NBTM is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding 5I5j Holding Group and NBTM New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBTM New Materials and 5I5j Holding 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 5I5j Holding Group are associated (or correlated) with NBTM New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBTM New Materials has no effect on the direction of 5I5j Holding i.e., 5I5j Holding and NBTM New go up and down completely randomly.

Pair Corralation between 5I5j Holding and NBTM New

Assuming the 90 days trading horizon 5I5j Holding Group is expected to under-perform the NBTM New. In addition to that, 5I5j Holding is 1.22 times more volatile than NBTM New Materials. It trades about -0.02 of its total potential returns per unit of risk. NBTM New Materials is currently generating about 0.08 per unit of volatility. If you would invest  1,582  in NBTM New Materials on September 25, 2024 and sell it today you would earn a total of  67.00  from holding NBTM New Materials or generate 4.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

5I5j Holding Group  vs.  NBTM New Materials

5I5j Holding Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 5I5j Holding Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 5I5j Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

NBTM New Materials

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NBTM New Materials are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NBTM New sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 5I5j Holding and NBTM New

The main advantage of trading using opposite 5I5j Holding and NBTM New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5I5j Holding position performs unexpectedly, NBTM New 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 NBTM New will offset losses from the drop in NBTM New's long position.

The idea behind 5I5j Holding Group and NBTM New Materials 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.