Correlation Between Winmark and Naas Technology

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

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

Diversification Opportunities for Winmark and Naas Technology

0.55

Correlation Coefficient

Winmark  Naas Technology

Very weak diversification

The 3 months correlation between Winmark and Naas is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR and Winmark 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 Winmark are associated (or correlated) with Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of Winmark i.e., Winmark and Naas Technology go up and down completely randomly.

Pair Corralation between Winmark and Naas Technology

Given the investment horizon of 90 days Winmark is expected to generate 0.31 times more return on investment than Naas Technology. However, Winmark is 3.27 times less risky than Naas Technology. It trades about -0.05 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.13 per unit of risk. If you would invest  37,955  in Winmark on January 30, 2024 and sell it today you would lose (1,955) from holding Winmark or give up 5.15% of portfolio value over 90 days.

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

Winmark  vs.  Naas Technology ADR

Winmark

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Winmark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Winmark is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Naas Technology ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Naas Technology ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Winmark and Naas Technology

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

The idea behind Winmark and Naas Technology ADR 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.