Correlation Between Genelux Common and Naas Technology

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

Diversification Opportunities for Genelux Common and Naas Technology

0.26
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Genelux Common and Naas Technology

Given the investment horizon of 90 days Genelux Common is expected to generate 0.49 times more return on investment than Naas Technology. However, Genelux Common is 2.06 times less risky than Naas Technology. It trades about -0.17 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.12 per unit of risk. If you would invest  746.00  in Genelux Common on December 30, 2023 and sell it today you would lose (103.00) from holding Genelux Common or give up 13.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Genelux Common  vs.  Naas Technology ADR

 Performance 
       Timeline  
Genelux Common 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Genelux Common 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 essential indicators remain fairly strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Naas Technology ADR 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Naas Technology ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Naas Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Genelux Common and Naas Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Genelux Common and Naas Technology

The main advantage of trading using opposite Genelux Common and Naas Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genelux Common position performs unexpectedly, Naas Technology 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 Naas Technology will offset losses from the drop in Naas Technology's long position.
The idea behind Genelux Common and Naas Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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