Correlation Between Worldcoin and NEXO

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

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

Diversification Opportunities for Worldcoin and NEXO

0.53

Correlation Coefficient

Worldcoin  NEXO

Very weak diversification

The 3 months correlation between Worldcoin and NEXO is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Worldcoin and NEXO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXO and Worldcoin 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 Worldcoin are associated (or correlated) with NEXO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXO has no effect on the direction of Worldcoin i.e., Worldcoin and NEXO go up and down completely randomly.

Pair Corralation between Worldcoin and NEXO

Assuming the 90 days trading horizon Worldcoin is expected to generate 1.21 times less return on investment than NEXO. In addition to that, Worldcoin is 3.81 times more volatile than NEXO. It trades about 0.03 of its total potential returns per unit of risk. NEXO is currently generating about 0.13 per unit of volatility. If you would invest  113.00  in NEXO on April 25, 2025 and sell it today you would earn a total of  19.00  from holding NEXO or generate 16.81% return on investment over 90 days.

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

Worldcoin  vs.  NEXO

Worldcoin

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Worldcoin are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Worldcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

NEXO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEXO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, NEXO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worldcoin and NEXO

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

The idea behind Worldcoin and NEXO 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.