Correlation Between Nuvve Holding and OReilly Automotive

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

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

Diversification Opportunities for Nuvve Holding and OReilly Automotive

-0.39

Correlation Coefficient

Nuvve Holding  OReilly Automotive

Very good diversification

The 3 months correlation between Nuvve and OReilly is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nuvve Holding Corp and OReilly Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OReilly Automotive and Nuvve Holding 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 Nuvve Holding Corp are associated (or correlated) with OReilly Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OReilly Automotive has no effect on the direction of Nuvve Holding i.e., Nuvve Holding and OReilly Automotive go up and down completely randomly.

Pair Corralation between Nuvve Holding and OReilly Automotive

Given the investment horizon of 90 days Nuvve Holding Corp is expected to under-perform the OReilly Automotive. In addition to that, Nuvve Holding is 9.93 times more volatile than OReilly Automotive. It trades about -0.03 of its total potential returns per unit of risk. OReilly Automotive is currently generating about 0.08 per unit of volatility. If you would invest  95,610  in OReilly Automotive on February 27, 2025 and sell it today you would earn a total of  40,528  from holding OReilly Automotive or generate 42.39% return on investment over 90 days.

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

Nuvve Holding Corp  vs.  OReilly Automotive

Nuvve Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak basic indicators, Nuvve Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

OReilly Automotive

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OReilly Automotive are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, OReilly Automotive is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuvve Holding and OReilly Automotive

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

The idea behind Nuvve Holding Corp and OReilly Automotive 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.