Correlation Between NEXO and Lisk

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

Diversification Opportunities for NEXO and Lisk

0.84
  Correlation Coefficient

Very poor diversification

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

Pair Corralation between NEXO and Lisk

Assuming the 90 days trading horizon NEXO is expected to under-perform the Lisk. But the crypto coin apears to be less risky and, when comparing its historical volatility, NEXO is 1.36 times less risky than Lisk. The crypto coin trades about 0.0 of its potential returns per unit of risk. The Lisk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  220.00  in Lisk on December 29, 2023 and sell it today you would lose (17.00) from holding Lisk or give up 7.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

NEXO  vs.  Lisk

 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.
Lisk 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lisk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Lisk exhibited solid returns over the last few months and may actually be approaching a breakup point.

NEXO and Lisk Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NEXO and Lisk

The main advantage of trading using opposite NEXO and Lisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXO position performs unexpectedly, Lisk 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 Lisk will offset losses from the drop in Lisk's long position.
The idea behind NEXO and Lisk 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.