Correlation Between Nubia Brand and ClimateRock

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

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

Diversification Opportunities for Nubia Brand and ClimateRock

0.78

Correlation Coefficient

Nubia Brand  ClimateRock

Poor diversification

The 3 months correlation between Nubia and ClimateRock is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nubia Brand International and ClimateRock Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClimateRock Class and Nubia Brand 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 Nubia Brand International are associated (or correlated) with ClimateRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClimateRock Class has no effect on the direction of Nubia Brand i.e., Nubia Brand and ClimateRock go up and down completely randomly.

Pair Corralation between Nubia Brand and ClimateRock

If you would invest  1,155  in ClimateRock Class A on September 15, 2024 and sell it today you would earn a total of  20.00  from holding ClimateRock Class A or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Nubia Brand International  vs.  ClimateRock Class A

Nubia Brand International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nubia Brand International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Nubia Brand is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

ClimateRock Class

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ClimateRock Class A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ClimateRock is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nubia Brand and ClimateRock

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

The idea behind Nubia Brand International and ClimateRock Class A 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.