Correlation Between NanoTech Gaming and Elray Resources

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

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

Diversification Opportunities for NanoTech Gaming and Elray Resources

0.07

Correlation Coefficient

NanoTech Gaming  Elray Resources

Significant diversification

The 3 months correlation between NanoTech and Elray is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NanoTech Gaming and Elray Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elray Resources and NanoTech Gaming 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 NanoTech Gaming are associated (or correlated) with Elray Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elray Resources has no effect on the direction of NanoTech Gaming i.e., NanoTech Gaming and Elray Resources go up and down completely randomly.

Pair Corralation between NanoTech Gaming and Elray Resources

If you would invest  0.05  in Elray Resources on September 19, 2024 and sell it today you would lose (0.01) from holding Elray Resources or give up 20.0% of portfolio value over 90 days.

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

NanoTech Gaming  vs.  Elray Resources

NanoTech Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Elray Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elray Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Elray Resources sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NanoTech Gaming and Elray Resources

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

The idea behind NanoTech Gaming and Elray Resources 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .