Correlation Between Crown Electrokinetics and Nanophase Technol

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

By analyzing existing cross correlation between Crown Electrokinetics Corp and Nanophase Technol, you can compare the effects of market volatilities on Crown Electrokinetics and Nanophase Technol 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 Crown Electrokinetics with a short position of Nanophase Technol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Nanophase Technol.

Diversification Opportunities for Crown Electrokinetics and Nanophase Technol

-0.26

Correlation Coefficient

Crown Electrokinetics  Nanophase Technol

Very good diversification

The 3 months correlation between Crown and Nanophase is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with Nanophase Technol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanophase Technol has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Nanophase Technol go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and Nanophase Technol

If you would invest  140.00  in Nanophase Technol on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Nanophase Technol or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Crown Electrokinetics Corp  vs.  Nanophase Technol

Crown Electrokinetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Electrokinetics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Nanophase Technol

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Crown Electrokinetics and Nanophase Technol

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

The idea behind Crown Electrokinetics Corp and Nanophase Technol 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.