Correlation Between Nanophase Technol and Iofina Plc

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

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

Diversification Opportunities for Nanophase Technol and Iofina Plc

-0.24

Correlation Coefficient

Nanophase Technol  Iofina Plc

Very good diversification

The 3 months correlation between Nanophase and Iofina is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nanophase Technol and Iofina plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iofina plc and Nanophase Technol 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 Nanophase Technol are associated (or correlated) with Iofina Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iofina plc has no effect on the direction of Nanophase Technol i.e., Nanophase Technol and Iofina Plc go up and down completely randomly.

Pair Corralation between Nanophase Technol and Iofina Plc

If you would invest  140.00  in Nanophase Technol on September 13, 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

Nanophase Technol  vs.  Iofina plc

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.

Iofina plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iofina plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nanophase Technol and Iofina Plc

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

The idea behind Nanophase Technol and Iofina plc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.