Correlation Between Nyrstar NV and Candela Invest

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

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

Diversification Opportunities for Nyrstar NV and Candela Invest

-0.75

Correlation Coefficient

Nyrstar NV  Candela Invest

Pay attention - limited upside

The 3 months correlation between Nyrstar and Candela is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nyrstar NV and Candela Invest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Candela Invest SA and Nyrstar NV 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 Nyrstar NV are associated (or correlated) with Candela Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Candela Invest SA has no effect on the direction of Nyrstar NV i.e., Nyrstar NV and Candela Invest go up and down completely randomly.

Pair Corralation between Nyrstar NV and Candela Invest

Assuming the 90 days trading horizon Nyrstar NV is expected to generate 1.32 times more return on investment than Candela Invest. However, Nyrstar NV is 1.32 times more volatile than Candela Invest SA. It trades about 0.14 of its potential returns per unit of risk. Candela Invest SA is currently generating about -0.14 per unit of risk. If you would invest  4.00  in Nyrstar NV on September 23, 2024 and sell it today you would earn a total of  3.28  from holding Nyrstar NV or generate 82.0% return on investment over 90 days.

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

Nyrstar NV  vs.  Candela Invest SA

Nyrstar NV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nyrstar NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nyrstar NV reported solid returns over the last few months and may actually be approaching a breakup point.

Candela Invest SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Candela Invest SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Nyrstar NV and Candela Invest

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

The idea behind Nyrstar NV and Candela Invest SA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.