Correlation Between Nano Labs and Wisekey International

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

By analyzing existing cross correlation between Nano Labs and Wisekey International Holding, you can compare the effects of market volatilities on Nano Labs and Wisekey International 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 Nano Labs with a short position of Wisekey International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Labs and Wisekey International.

Diversification Opportunities for Nano Labs and Wisekey International

0.74

Correlation Coefficient

Nano Labs  Wisekey International

Poor diversification

The 3 months correlation between Nano and Wisekey is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International and Nano Labs 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 Nano Labs are associated (or correlated) with Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Nano Labs i.e., Nano Labs and Wisekey International go up and down completely randomly.

Pair Corralation between Nano Labs and Wisekey International

Allowing for the 90-day total investment horizon Nano Labs is expected to under-perform the Wisekey International. In addition to that, Nano Labs is 4.21 times more volatile than Wisekey International Holding. It trades about -0.11 of its total potential returns per unit of risk. Wisekey International Holding is currently generating about -0.19 per unit of volatility. If you would invest  242.00  in Wisekey International Holding on February 3, 2024 and sell it today you would lose (42.00) from holding Wisekey International Holding or give up 17.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nano Labs  vs.  Wisekey International Holding

Nano Labs

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Labs are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Nano Labs sustained solid returns over the last few months and may actually be approaching a breakup point.

Wisekey International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisekey International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nano Labs and Wisekey International

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

The idea behind Nano Labs and Wisekey International Holding 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.