Correlation Between CCC Intelligent and Nutanix

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

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

Diversification Opportunities for CCC Intelligent and Nutanix

0.72

Correlation Coefficient

CCC Intelligent  Nutanix

Poor diversification

The 3 months correlation between CCC and Nutanix is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CCC Intelligent Solutions and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix and CCC Intelligent 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 CCC Intelligent Solutions are associated (or correlated) with Nutanix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutanix has no effect on the direction of CCC Intelligent i.e., CCC Intelligent and Nutanix go up and down completely randomly.

Pair Corralation between CCC Intelligent and Nutanix

Given the investment horizon of 90 days CCC Intelligent Solutions is expected to generate 0.57 times more return on investment than Nutanix. However, CCC Intelligent Solutions is 1.77 times less risky than Nutanix. It trades about 0.22 of its potential returns per unit of risk. Nutanix is currently generating about 0.06 per unit of risk. If you would invest  1,063  in CCC Intelligent Solutions on September 3, 2024 and sell it today you would earn a total of  202.00  from holding CCC Intelligent Solutions or generate 19.0% return on investment over 90 days.

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

CCC Intelligent Solutions  vs.  Nutanix

CCC Intelligent Solutions

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CCC Intelligent Solutions are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, CCC Intelligent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nutanix

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nutanix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CCC Intelligent and Nutanix

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

The idea behind CCC Intelligent Solutions and Nutanix 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.