Correlation Between NEXO and Hive

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NEXO and Hive 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 NEXO and Hive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXO and Hive, you can compare the effects of market volatilities on NEXO and Hive 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 NEXO with a short position of Hive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXO and Hive.

Diversification Opportunities for NEXO and Hive

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between NEXO and Hive is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NEXO and Hive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hive and NEXO 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 NEXO are associated (or correlated) with Hive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hive has no effect on the direction of NEXO i.e., NEXO and Hive go up and down completely randomly.

Pair Corralation between NEXO and Hive

Assuming the 90 days trading horizon NEXO is expected to generate 5.74 times less return on investment than Hive. But when comparing it to its historical volatility, NEXO is 1.35 times less risky than Hive. It trades about 0.04 of its potential returns per unit of risk. Hive is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Hive on December 29, 2023 and sell it today you would earn a total of  7.00  from holding Hive or generate 20.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

NEXO  vs.  Hive

 Performance 
       Timeline  
NEXO 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in NEXO are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NEXO exhibited solid returns over the last few months and may actually be approaching a breakup point.
Hive 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hive are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Hive exhibited solid returns over the last few months and may actually be approaching a breakup point.

NEXO and Hive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NEXO and Hive

The main advantage of trading using opposite NEXO and Hive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXO position performs unexpectedly, Hive 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 Hive will offset losses from the drop in Hive's long position.
The idea behind NEXO and Hive 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.
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities