Correlation Between Clean Motion and Nicoccino Holding

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

By analyzing existing cross correlation between Clean Motion AB and Nicoccino Holding AB, you can compare the effects of market volatilities on Clean Motion and Nicoccino Holding 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 Clean Motion with a short position of Nicoccino Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Motion and Nicoccino Holding.

Diversification Opportunities for Clean Motion and Nicoccino Holding

0.61

Correlation Coefficient

Clean Motion  Nicoccino Holding

Poor diversification

The 3 months correlation between Clean and Nicoccino is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Clean Motion AB and Nicoccino Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicoccino Holding and Clean Motion 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 Clean Motion AB are associated (or correlated) with Nicoccino Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicoccino Holding has no effect on the direction of Clean Motion i.e., Clean Motion and Nicoccino Holding go up and down completely randomly.

Pair Corralation between Clean Motion and Nicoccino Holding

Assuming the 90 days trading horizon Clean Motion AB is expected to under-perform the Nicoccino Holding. But the stock apears to be less risky and, when comparing its historical volatility, Clean Motion AB is 1.65 times less risky than Nicoccino Holding. The stock trades about -0.14 of its potential returns per unit of risk. The Nicoccino Holding AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Nicoccino Holding AB on September 12, 2024 and sell it today you would lose (50.00) from holding Nicoccino Holding AB or give up 25.0% of portfolio value over 90 days.

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

Clean Motion AB  vs.  Nicoccino Holding AB

Clean Motion AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Motion AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nicoccino Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nicoccino Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nicoccino Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Clean Motion and Nicoccino Holding

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

The idea behind Clean Motion AB and Nicoccino Holding AB 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.