Correlation Between Naas Technology and Comfort Systems
Can any of the company-specific risk be diversified away by investing in both Naas Technology and Comfort Systems 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 Naas Technology and Comfort Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naas Technology ADR and Comfort Systems USA, you can compare the effects of market volatilities on Naas Technology and Comfort Systems 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 Naas Technology with a short position of Comfort Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naas Technology and Comfort Systems.
Diversification Opportunities for Naas Technology and Comfort Systems
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Naas and Comfort is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Naas Technology ADR and Comfort Systems USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comfort Systems USA and Naas Technology 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 Naas Technology ADR are associated (or correlated) with Comfort Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comfort Systems USA has no effect on the direction of Naas Technology i.e., Naas Technology and Comfort Systems go up and down completely randomly.
Pair Corralation between Naas Technology and Comfort Systems
Given the investment horizon of 90 days Naas Technology ADR is expected to under-perform the Comfort Systems. In addition to that, Naas Technology is 4.13 times more volatile than Comfort Systems USA. It trades about 0.0 of its total potential returns per unit of risk. Comfort Systems USA is currently generating about 0.13 per unit of volatility. If you would invest 8,436 in Comfort Systems USA on January 26, 2024 and sell it today you would earn a total of 22,433 from holding Comfort Systems USA or generate 265.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Naas Technology ADR vs. Comfort Systems USA
Performance |
Timeline |
Naas Technology ADR |
Comfort Systems USA |
Naas Technology and Comfort Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naas Technology and Comfort Systems
The main advantage of trading using opposite Naas Technology and Comfort Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naas Technology position performs unexpectedly, Comfort Systems 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 Comfort Systems will offset losses from the drop in Comfort Systems' long position.Naas Technology vs. Target | Naas Technology vs. Lowes Companies | Naas Technology vs. Kohls Corp | Naas Technology vs. Gap Inc |
Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
Check out your portfolio center.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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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