Correlation Between Novatech Industries and Marie Brizard

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

By analyzing existing cross correlation between Novatech Industries SA and Marie Brizard Wine, you can compare the effects of market volatilities on Novatech Industries and Marie Brizard 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 Novatech Industries with a short position of Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novatech Industries and Marie Brizard.

Diversification Opportunities for Novatech Industries and Marie Brizard

-0.78

Correlation Coefficient

Novatech Industries  Marie Brizard

Pay attention - limited upside

The 3 months correlation between Novatech and Marie is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Novatech Industries SA and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine and Novatech Industries 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 Novatech Industries SA are associated (or correlated) with Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of Novatech Industries i.e., Novatech Industries and Marie Brizard go up and down completely randomly.

Pair Corralation between Novatech Industries and Marie Brizard

Assuming the 90 days trading horizon Novatech Industries SA is expected to generate 4.53 times more return on investment than Marie Brizard. However, Novatech Industries is 4.53 times more volatile than Marie Brizard Wine. It trades about 0.15 of its potential returns per unit of risk. Marie Brizard Wine is currently generating about -0.12 per unit of risk. If you would invest  1,000.00  in Novatech Industries SA on April 24, 2025 and sell it today you would earn a total of  470.00  from holding Novatech Industries SA or generate 47.0% return on investment over 90 days.

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

Novatech Industries SA  vs.  Marie Brizard Wine

Novatech Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Novatech Industries SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Novatech Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Marie Brizard Wine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic 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 Novatech Industries and Marie Brizard

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

The idea behind Novatech Industries SA and Marie Brizard Wine 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.