Correlation Between Near and SPACE

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

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

Diversification Opportunities for Near and SPACE

0.77

Correlation Coefficient

Near  SPACE

Poor diversification

The 3 months correlation between Near and SPACE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Near and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and Near 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 Near are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Near i.e., Near and SPACE go up and down completely randomly.

Pair Corralation between Near and SPACE

Assuming the 90 days trading horizon Near is expected to generate 1.01 times more return on investment than SPACE. However, Near is 1.01 times more volatile than SPACE. It trades about 0.07 of its potential returns per unit of risk. SPACE is currently generating about 0.03 per unit of risk. If you would invest  262.00  in Near on April 24, 2025 and sell it today you would earn a total of  41.00  from holding Near or generate 15.65% return on investment over 90 days.

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

Near  vs.  SPACE

Near

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Near are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Near exhibited solid returns over the last few months and may actually be approaching a breakup point.

SPACE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Near and SPACE

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

The idea behind Near and SPACE 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.