Correlation Between Nasdaq and Assicurazioni Generali

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

By analyzing existing cross correlation between Nasdaq Inc and Assicurazioni Generali SpA, you can compare the effects of market volatilities on Nasdaq and Assicurazioni Generali 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 Nasdaq with a short position of Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Assicurazioni Generali.

Diversification Opportunities for Nasdaq and Assicurazioni Generali

0.65

Correlation Coefficient

Nasdaq  Assicurazioni Generali

Poor diversification

The 3 months correlation between Nasdaq and Assicurazioni is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of Nasdaq i.e., Nasdaq and Assicurazioni Generali go up and down completely randomly.

Pair Corralation between Nasdaq and Assicurazioni Generali

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.87 times more return on investment than Assicurazioni Generali. However, Nasdaq Inc is 1.15 times less risky than Assicurazioni Generali. It trades about 0.11 of its potential returns per unit of risk. Assicurazioni Generali SpA is currently generating about 0.06 per unit of risk. If you would invest  7,282  in Nasdaq Inc on September 25, 2024 and sell it today you would earn a total of  512.00  from holding Nasdaq Inc or generate 7.03% return on investment over 90 days.

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

Nasdaq Inc  vs.  Assicurazioni Generali SpA

Nasdaq Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Assicurazioni Generali

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Assicurazioni Generali 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 Nasdaq and Assicurazioni Generali

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

The idea behind Nasdaq Inc and Assicurazioni Generali SpA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.