Correlation Between Nano One and Diamond Fields

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

By analyzing existing cross correlation between Nano One Materials and Diamond Fields Resources, you can compare the effects of market volatilities on Nano One and Diamond Fields 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 One with a short position of Diamond Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano One and Diamond Fields.

Diversification Opportunities for Nano One and Diamond Fields

-0.59

Correlation Coefficient

Nano One  Diamond Fields

Excellent diversification

The 3 months correlation between Nano and Diamond is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nano One Materials and Diamond Fields Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Fields Resources and Nano One 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 One Materials are associated (or correlated) with Diamond Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Fields Resources has no effect on the direction of Nano One i.e., Nano One and Diamond Fields go up and down completely randomly.

Pair Corralation between Nano One and Diamond Fields

Assuming the 90 days trading horizon Nano One Materials is expected to generate 0.4 times more return on investment than Diamond Fields. However, Nano One Materials is 2.51 times less risky than Diamond Fields. It trades about 0.13 of its potential returns per unit of risk. Diamond Fields Resources is currently generating about 0.01 per unit of risk. If you would invest  75.00  in Nano One Materials on April 24, 2025 and sell it today you would earn a total of  26.00  from holding Nano One Materials or generate 34.67% return on investment over 90 days.

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

Nano One Materials  vs.  Diamond Fields Resources

Nano One Materials

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nano One Materials are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Nano One displayed solid returns over the last few months and may actually be approaching a breakup point.

Diamond Fields Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Diamond Fields Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Diamond Fields may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Nano One and Diamond Fields

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

The idea behind Nano One Materials and Diamond Fields Resources 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.