Correlation Between Nexalin Technology and Nasdaq 100

Can any of the company-specific risk be diversified away by investing in both Nexalin Technology and Nasdaq 100 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 Nexalin Technology and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nexalin Technology and Nasdaq 100 Total, you can compare the effects of market volatilities on Nexalin Technology and Nasdaq 100 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 Nexalin Technology with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexalin Technology and Nasdaq 100.

Diversification Opportunities for Nexalin Technology and Nasdaq 100

0.73

Correlation Coefficient

Nexalin Technology  Nasdaq 100

Poor diversification

The 3 months correlation between Nexalin and Nasdaq is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nexalin Technology and Nasdaq 100 Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Total and Nexalin Technology 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 Nexalin Technology are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Total has no effect on the direction of Nexalin Technology i.e., Nexalin Technology and Nasdaq 100 go up and down completely randomly.

Pair Corralation between Nexalin Technology and Nasdaq 100

Considering the 90-day investment horizon Nexalin Technology is expected to generate 11.75 times more return on investment than Nasdaq 100. However, Nexalin Technology is 11.75 times more volatile than Nasdaq 100 Total. It trades about 0.24 of its potential returns per unit of risk. Nasdaq 100 Total is currently generating about 0.11 per unit of risk. If you would invest  67.00  in Nexalin Technology on September 30, 2024 and sell it today you would earn a total of  228.00  from holding Nexalin Technology or generate 340.3% return on investment over 90 days.

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

Nexalin Technology  vs.  Nasdaq 100 Total

Pair Trading with Nexalin Technology and Nasdaq 100

The main advantage of trading using opposite Nexalin Technology and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexalin Technology position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.

The idea behind Nexalin Technology and Nasdaq 100 Total 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.