Correlation Between Nt Non-us and Small Company

Can any of the company-specific risk be diversified away by investing in both Nt Non-us and Small Company 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 Nt Non-us and Small Company into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nt Non US Intrinsic and Small Pany Fund, you can compare the effects of market volatilities on Nt Non-us and Small Company 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 Nt Non-us with a short position of Small Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nt Non-us and Small Company.

Diversification Opportunities for Nt Non-us and Small Company

-0.66

Correlation Coefficient

Nt Non-us  Small Company

Excellent diversification

The 3 months correlation between ANTUX and Small is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nt Non US Intrinsic and Small Pany Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Pany Fund and Nt Non-us 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 Nt Non US Intrinsic are associated (or correlated) with Small Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Pany Fund has no effect on the direction of Nt Non-us i.e., Nt Non-us and Small Company go up and down completely randomly.

Pair Corralation between Nt Non-us and Small Company

Assuming the 90 days horizon Nt Non US Intrinsic is expected to under-perform the Small Company. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nt Non US Intrinsic is 1.35 times less risky than Small Company. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Small Pany Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,596  in Small Pany Fund on September 4, 2024 and sell it today you would earn a total of  176.00  from holding Small Pany Fund or generate 11.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nt Non US Intrinsic  vs.  Small Pany Fund

Nt Non Intrinsic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nt Non US Intrinsic has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Small Pany Fund

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Small Pany Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Small Company may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nt Non-us and Small Company

The main advantage of trading using opposite Nt Non-us and Small Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nt Non-us position performs unexpectedly, Small Company 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 Small Company will offset losses from the drop in Small Company's long position.

The idea behind Nt Non US Intrinsic and Small Pany Fund 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.