Correlation Between NEXO and HYN

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

By analyzing existing cross correlation between NEXO and HYN, you can compare the effects of market volatilities on NEXO and HYN 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 HYN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXO and HYN.

Diversification Opportunities for NEXO and HYN

-0.76

Correlation Coefficient

NEXO  HYN

Pay attention - limited upside

The 3 months correlation between NEXO and HYN is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding NEXO and HYN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYN 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 HYN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYN has no effect on the direction of NEXO i.e., NEXO and HYN go up and down completely randomly.

Pair Corralation between NEXO and HYN

If you would invest  3.31  in HYN on January 20, 2024 and sell it today you would earn a total of  0.00  from holding HYN or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

NEXO  vs.  HYN

NEXO

Risk-Adjusted Performance

14 of 100

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.

HYN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HYN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HYN is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NEXO and HYN

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

The idea behind NEXO and HYN 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.