Correlation Between IShares Canadian and Nubeva Technologies

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

By analyzing existing cross correlation between iShares Canadian HYBrid and Nubeva Technologies, you can compare the effects of market volatilities on IShares Canadian and Nubeva Technologies 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 IShares Canadian with a short position of Nubeva Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Nubeva Technologies.

Diversification Opportunities for IShares Canadian and Nubeva Technologies

-0.44

Correlation Coefficient

IShares Canadian  Nubeva Technologies

Very good diversification

The 3 months correlation between IShares and Nubeva is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Nubeva Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nubeva Technologies and IShares Canadian 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 iShares Canadian HYBrid are associated (or correlated) with Nubeva Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nubeva Technologies has no effect on the direction of IShares Canadian i.e., IShares Canadian and Nubeva Technologies go up and down completely randomly.

Pair Corralation between IShares Canadian and Nubeva Technologies

Assuming the 90 days trading horizon IShares Canadian is expected to generate 2.47 times less return on investment than Nubeva Technologies. But when comparing it to its historical volatility, iShares Canadian HYBrid is 17.47 times less risky than Nubeva Technologies. It trades about 0.2 of its potential returns per unit of risk. Nubeva Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Nubeva Technologies on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Nubeva Technologies or generate 0.0% return on investment over 90 days.

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

iShares Canadian HYBrid  vs.  Nubeva Technologies

iShares Canadian HYBrid

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Canadian HYBrid are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Nubeva Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nubeva Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nubeva Technologies is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IShares Canadian and Nubeva Technologies

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

The idea behind iShares Canadian HYBrid and Nubeva Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.