Correlation Between Nuvve Holding and Barloworld

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

By analyzing existing cross correlation between Nuvve Holding Corp and Barloworld Ltd ADR, you can compare the effects of market volatilities on Nuvve Holding and Barloworld 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 Nuvve Holding with a short position of Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvve Holding and Barloworld.

Diversification Opportunities for Nuvve Holding and Barloworld

-0.44

Correlation Coefficient

Nuvve Holding  Barloworld

Very good diversification

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

Pair Corralation between Nuvve Holding and Barloworld

Assuming the 90 days horizon Nuvve Holding Corp is expected to under-perform the Barloworld. In addition to that, Nuvve Holding is 1.93 times more volatile than Barloworld Ltd ADR. It trades about -0.06 of its total potential returns per unit of risk. Barloworld Ltd ADR is currently generating about 0.16 per unit of volatility. If you would invest  354.00  in Barloworld Ltd ADR on February 28, 2024 and sell it today you would earn a total of  111.00  from holding Barloworld Ltd ADR or generate 31.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.68%
Values	Daily Returns

Nuvve Holding Corp  vs.  Barloworld Ltd ADR

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Barloworld ADR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barloworld Ltd ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Barloworld showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuvve Holding and Barloworld

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

The idea behind Nuvve Holding Corp and Barloworld Ltd ADR 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.