Correlation Between Rugvista Group and Nelly Group

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

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

Diversification Opportunities for Rugvista Group and Nelly Group

-0.24

Correlation Coefficient

Rugvista Group  Nelly Group

Very good diversification

The 3 months correlation between Rugvista and Nelly is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Rugvista Group AB and Nelly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelly Group AB and Rugvista Group 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 Rugvista Group AB are associated (or correlated) with Nelly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelly Group AB has no effect on the direction of Rugvista Group i.e., Rugvista Group and Nelly Group go up and down completely randomly.

Pair Corralation between Rugvista Group and Nelly Group

Assuming the 90 days trading horizon Rugvista Group is expected to generate 4.01 times less return on investment than Nelly Group. But when comparing it to its historical volatility, Rugvista Group AB is 1.06 times less risky than Nelly Group. It trades about 0.03 of its potential returns per unit of risk. Nelly Group AB is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,530  in Nelly Group AB on September 14, 2024 and sell it today you would earn a total of  445.00  from holding Nelly Group AB or generate 17.59% return on investment over 90 days.

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

Rugvista Group AB  vs.  Nelly Group AB

Rugvista Group AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rugvista Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Rugvista Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Nelly Group AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nelly Group AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nelly Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rugvista Group and Nelly Group

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

The idea behind Rugvista Group AB and Nelly Group AB 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.