Correlation Between 67077MAU2 and Usio

Can any of the company-specific risk be diversified away by investing in both 67077MAU2 and Usio 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 67077MAU2 and Usio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NUTRIEN LTD and Usio Inc, you can compare the effects of market volatilities on 67077MAU2 and Usio 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 67077MAU2 with a short position of Usio. Check out your portfolio center. Please also check ongoing floating volatility patterns of 67077MAU2 and Usio.

Diversification Opportunities for 67077MAU2 and Usio

-0.26

Correlation Coefficient

67077MAU2  Usio

Very good diversification

The 3 months correlation between 67077MAU2 and Usio is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NUTRIEN LTD and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc and 67077MAU2 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 NUTRIEN LTD are associated (or correlated) with Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of 67077MAU2 i.e., 67077MAU2 and Usio go up and down completely randomly.

Pair Corralation between 67077MAU2 and Usio

Assuming the 90 days trading horizon NUTRIEN LTD is expected to generate 0.78 times more return on investment than Usio. However, NUTRIEN LTD is 1.29 times less risky than Usio. It trades about 0.11 of its potential returns per unit of risk. Usio Inc is currently generating about 0.01 per unit of risk. If you would invest  9,274  in NUTRIEN LTD on September 3, 2024 and sell it today you would earn a total of  871.00  from holding NUTRIEN LTD or generate 9.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.56%
Values	Daily Returns

NUTRIEN LTD  vs.  Usio Inc

NUTRIEN LTD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NUTRIEN LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 67077MAU2 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with 67077MAU2 and Usio

The main advantage of trading using opposite 67077MAU2 and Usio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 67077MAU2 position performs unexpectedly, Usio 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 Usio will offset losses from the drop in Usio's long position.

The idea behind NUTRIEN LTD and Usio Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..