Correlation Between Nubia Brand and TLGY Acquisition

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Can any of the company-specific risk be diversified away by investing in both Nubia Brand and TLGY Acquisition 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 TLGY Acquisition 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 TLGY Acquisition Corp, you can compare the effects of market volatilities on Nubia Brand and TLGY Acquisition 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 TLGY Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nubia Brand and TLGY Acquisition.

Diversification Opportunities for Nubia Brand and TLGY Acquisition

NubiaTLGYDiversified AwayNubiaTLGYDiversified Away100%
0.78
  Correlation Coefficient

Poor diversification

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

Pair Corralation between Nubia Brand and TLGY Acquisition

If you would invest  1,151  in TLGY Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  13.00  from holding TLGY Acquisition Corp or generate 1.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy1.56%
ValuesDaily Returns

Nubia Brand International  vs.  TLGY Acquisition Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0.51.01.52.0
JavaScript chart by amCharts 3.21.15NUBI TLGY
       Timeline  
Nubia Brand International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
TLGY Acquisition Corp 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in TLGY Acquisition Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, TLGY Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec11.5211.5411.5611.5811.611.6211.64

Nubia Brand and TLGY Acquisition Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.89-0.63-0.37-0.11-0.0076790.09140.330.590.851.11 10203040506070
JavaScript chart by amCharts 3.21.15NUBI TLGY
       Returns  

Pair Trading with Nubia Brand and TLGY Acquisition

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

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