Correlation Between NanoTech Gaming and ReWalk Robotics

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

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

Diversification Opportunities for NanoTech Gaming and ReWalk Robotics

0.0

Correlation Coefficient

NanoTech Gaming  ReWalk Robotics

Pay attention - limited upside

The 3 months correlation between NanoTech and ReWalk is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NanoTech Gaming and ReWalk Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ReWalk Robotics 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 ReWalk Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ReWalk Robotics has no effect on the direction of NanoTech Gaming i.e., NanoTech Gaming and ReWalk Robotics go up and down completely randomly.

Pair Corralation between NanoTech Gaming and ReWalk Robotics

Given the investment horizon of 90 days NanoTech Gaming is expected to generate 12.1 times more return on investment than ReWalk Robotics. However, NanoTech Gaming is 12.1 times more volatile than ReWalk Robotics. It trades about 0.05 of its potential returns per unit of risk. ReWalk Robotics is currently generating about -0.05 per unit of risk. If you would invest  0.02  in NanoTech Gaming on September 21, 2024 and sell it today you would lose (0.01) from holding NanoTech Gaming or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.66%
Values	Daily Returns

NanoTech Gaming  vs.  ReWalk Robotics

NanoTech Gaming

Risk-Adjusted Performance

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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.

ReWalk Robotics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ReWalk Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with NanoTech Gaming and ReWalk Robotics

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

The idea behind NanoTech Gaming and ReWalk Robotics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.