Correlation Between Nasdaq and Cryomass Technologies

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

By analyzing existing cross correlation between Nasdaq Inc and Cryomass Technologies, you can compare the effects of market volatilities on Nasdaq and Cryomass Technologies 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 Cryomass Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Cryomass Technologies.

Diversification Opportunities for Nasdaq and Cryomass Technologies

-0.27

Correlation Coefficient

Nasdaq  Cryomass Technologies

Very good diversification

The 3 months correlation between Nasdaq and Cryomass is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Cryomass Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cryomass Technologies 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 Cryomass Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cryomass Technologies has no effect on the direction of Nasdaq i.e., Nasdaq and Cryomass Technologies go up and down completely randomly.

Pair Corralation between Nasdaq and Cryomass Technologies

Given the investment horizon of 90 days Nasdaq is expected to generate 3.06 times less return on investment than Cryomass Technologies. But when comparing it to its historical volatility, Nasdaq Inc is 14.55 times less risky than Cryomass Technologies. It trades about 0.16 of its potential returns per unit of risk. Cryomass Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2.09  in Cryomass Technologies on September 17, 2024 and sell it today you would lose (0.50) from holding Cryomass Technologies or give up 23.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Nasdaq Inc  vs.  Cryomass Technologies

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) 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.

Cryomass Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cryomass Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Cryomass Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and Cryomass Technologies

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

The idea behind Nasdaq Inc and Cryomass Technologies 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.