Correlation Between AptarGroup and Holdco Nuvo

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

By analyzing existing cross correlation between AptarGroup and Holdco Nuvo Group, you can compare the effects of market volatilities on AptarGroup and Holdco Nuvo 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 AptarGroup with a short position of Holdco Nuvo. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and Holdco Nuvo.

Diversification Opportunities for AptarGroup and Holdco Nuvo

-0.8

Correlation Coefficient

AptarGroup  Holdco Nuvo

Pay attention - limited upside

The 3 months correlation between AptarGroup and Holdco is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Holdco Nuvo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holdco Nuvo Group and AptarGroup 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 AptarGroup are associated (or correlated) with Holdco Nuvo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holdco Nuvo Group has no effect on the direction of AptarGroup i.e., AptarGroup and Holdco Nuvo go up and down completely randomly.

Pair Corralation between AptarGroup and Holdco Nuvo

Considering the 90-day investment horizon AptarGroup is expected to generate 26.05 times less return on investment than Holdco Nuvo. But when comparing it to its historical volatility, AptarGroup is 48.7 times less risky than Holdco Nuvo. It trades about 0.19 of its potential returns per unit of risk. Holdco Nuvo Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.19  in Holdco Nuvo Group on September 12, 2024 and sell it today you would lose (0.99) from holding Holdco Nuvo Group or give up 83.19% of portfolio value over 90 days.

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

AptarGroup  vs.  Holdco Nuvo Group

AptarGroup

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, AptarGroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Holdco Nuvo Group

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Holdco Nuvo Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Holdco Nuvo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AptarGroup and Holdco Nuvo

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

The idea behind AptarGroup and Holdco Nuvo Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.