Correlation Between NanoXplore and AdvanSix

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

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

Diversification Opportunities for NanoXplore and AdvanSix

0.06

Correlation Coefficient

NanoXplore  AdvanSix

Significant diversification

The 3 months correlation between NanoXplore and AdvanSix is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NanoXplore and AdvanSix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvanSix and NanoXplore 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 NanoXplore are associated (or correlated) with AdvanSix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvanSix has no effect on the direction of NanoXplore i.e., NanoXplore and AdvanSix go up and down completely randomly.

Pair Corralation between NanoXplore and AdvanSix

Assuming the 90 days horizon NanoXplore is expected to generate 10.81 times less return on investment than AdvanSix. In addition to that, NanoXplore is 1.37 times more volatile than AdvanSix. It trades about 0.01 of its total potential returns per unit of risk. AdvanSix is currently generating about 0.14 per unit of volatility. If you would invest  2,771  in AdvanSix on September 3, 2024 and sell it today you would earn a total of  476.00  from holding AdvanSix or generate 17.18% return on investment over 90 days.

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

NanoXplore  vs.  AdvanSix

NanoXplore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoXplore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NanoXplore is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AdvanSix

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AdvanSix are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, AdvanSix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NanoXplore and AdvanSix

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

The idea behind NanoXplore and AdvanSix 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 Stocks Directory module to find actively traded stocks across global markets.