Correlation Between Ainos and Nevro Corp

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Can any of the company-specific risk be diversified away by investing in both Ainos and Nevro Corp 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 Ainos and Nevro Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ainos Inc and Nevro Corp, you can compare the effects of market volatilities on Ainos and Nevro Corp 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 Ainos with a short position of Nevro Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainos and Nevro Corp.

Diversification Opportunities for Ainos and Nevro Corp

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ainos and Nevro is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ainos Inc and Nevro Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevro Corp and Ainos 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 Ainos Inc are associated (or correlated) with Nevro Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevro Corp has no effect on the direction of Ainos i.e., Ainos and Nevro Corp go up and down completely randomly.

Pair Corralation between Ainos and Nevro Corp

Given the investment horizon of 90 days Ainos Inc is expected to generate 3.32 times more return on investment than Nevro Corp. However, Ainos is 3.32 times more volatile than Nevro Corp. It trades about -0.02 of its potential returns per unit of risk. Nevro Corp is currently generating about -0.17 per unit of risk. If you would invest  137.00  in Ainos Inc on March 6, 2024 and sell it today you would lose (55.00) from holding Ainos Inc or give up 40.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ainos Inc  vs.  Nevro Corp

 Performance 
       Timeline  
Ainos Inc 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Ainos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Nevro Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nevro Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ainos and Nevro Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ainos and Nevro Corp

The main advantage of trading using opposite Ainos and Nevro Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainos position performs unexpectedly, Nevro Corp 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 Nevro Corp will offset losses from the drop in Nevro Corp's long position.
The idea behind Ainos Inc and Nevro Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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