Correlation Between Nutanix and CDN Maverick

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

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

Diversification Opportunities for Nutanix and CDN Maverick

-0.02

Correlation Coefficient

Nutanix  CDN Maverick

Good diversification

The 3 months correlation between Nutanix and CDN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and CDN Maverick Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN Maverick Capital and Nutanix 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 Nutanix are associated (or correlated) with CDN Maverick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN Maverick Capital has no effect on the direction of Nutanix i.e., Nutanix and CDN Maverick go up and down completely randomly.

Pair Corralation between Nutanix and CDN Maverick

Given the investment horizon of 90 days Nutanix is expected to generate 0.99 times more return on investment than CDN Maverick. However, Nutanix is 1.01 times less risky than CDN Maverick. It trades about 0.16 of its potential returns per unit of risk. CDN Maverick Capital is currently generating about -0.04 per unit of risk. If you would invest  5,876  in Nutanix on February 23, 2024 and sell it today you would earn a total of  1,310  from holding Nutanix or generate 22.29% return on investment over 90 days.

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

Nutanix  vs.  CDN Maverick Capital

Nutanix

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nutanix are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Nutanix showed solid returns over the last few months and may actually be approaching a breakup point.

CDN Maverick Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CDN Maverick Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, CDN Maverick is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nutanix and CDN Maverick

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

The idea behind Nutanix and CDN Maverick Capital 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 Commodity Directory module to find actively traded commodities issued by global exchanges.