Correlation Between International Stem and Nutanix

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

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

Diversification Opportunities for International Stem and Nutanix

0.36

Correlation Coefficient

International Stem  Nutanix

Weak diversification

The 3 months correlation between International and Nutanix is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding International Stem Cell and Nutanix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutanix and International Stem 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 International Stem Cell 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 International Stem i.e., International Stem and Nutanix go up and down completely randomly.

Pair Corralation between International Stem and Nutanix

Given the investment horizon of 90 days International Stem Cell is expected to generate 6.99 times more return on investment than Nutanix. However, International Stem is 6.99 times more volatile than Nutanix. It trades about 0.08 of its potential returns per unit of risk. Nutanix is currently generating about 0.09 per unit of risk. If you would invest  15.00  in International Stem Cell on September 30, 2024 and sell it today you would lose (5.00) from holding International Stem Cell or give up 33.33% of portfolio value over 90 days.

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

International Stem Cell  vs.  Nutanix

International Stem Cell

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Stem Cell are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, International Stem displayed solid returns over the last few months and may actually be approaching a breakup point.

Nutanix

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nutanix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with International Stem and Nutanix

The main advantage of trading using opposite International Stem and Nutanix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stem 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 International Stem Cell 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.