Correlation Between Nutanix and Yext

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

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

Diversification Opportunities for Nutanix and Yext

0.74

Correlation Coefficient

Nutanix  Yext

Poor diversification

The 3 months correlation between Nutanix and Yext is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Yext Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yext Inc and Nutanix 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 Nutanix are associated (or correlated) with Yext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yext Inc has no effect on the direction of Nutanix i.e., Nutanix and Yext go up and down completely randomly.

Pair Corralation between Nutanix and Yext

Given the investment horizon of 90 days Nutanix is expected to generate 7.08 times less return on investment than Yext. But when comparing it to its historical volatility, Nutanix is 1.23 times less risky than Yext. It trades about 0.06 of its potential returns per unit of risk. Yext Inc is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  481.00  in Yext Inc on September 3, 2024 and sell it today you would earn a total of  365.00  from holding Yext Inc or generate 75.88% return on investment over 90 days.

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

Nutanix  vs.  Yext Inc

Nutanix

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nutanix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yext Inc

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yext Inc are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Yext unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nutanix and Yext

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

The idea behind Nutanix and Yext Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .