Correlation Between Alpha One and Nubia Brand

Can any of the company-specific risk be diversified away by investing in both Alpha One and Nubia Brand 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 Alpha One and Nubia Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpha One and Nubia Brand International, you can compare the effects of market volatilities on Alpha One and Nubia Brand 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 Alpha One with a short position of Nubia Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha One and Nubia Brand.

Diversification Opportunities for Alpha One and Nubia Brand

0.0

Correlation Coefficient

Alpha One  Nubia Brand

Pay attention - limited upside

The 3 months correlation between Alpha and Nubia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alpha One and Nubia Brand International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nubia Brand International and Alpha One 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 Alpha One are associated (or correlated) with Nubia Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nubia Brand International has no effect on the direction of Alpha One i.e., Alpha One and Nubia Brand go up and down completely randomly.

Pair Corralation between Alpha One and Nubia Brand

Given the investment horizon of 90 days Alpha One is expected to generate 26.61 times more return on investment than Nubia Brand. However, Alpha One is 26.61 times more volatile than Nubia Brand International. It trades about 0.03 of its potential returns per unit of risk. Nubia Brand International is currently generating about 0.13 per unit of risk. If you would invest  251.00  in Alpha One on September 16, 2024 and sell it today you would lose (13.00) from holding Alpha One or give up 5.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	28.77%
Values	Daily Returns

Alpha One  vs.  Nubia Brand International

Alpha One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Alpha One is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Nubia Brand International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nubia Brand International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Nubia Brand is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alpha One and Nubia Brand

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

The idea behind Alpha One and Nubia Brand International 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.