Correlation Between Immolease Trust and Nextensa

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

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

Diversification Opportunities for Immolease Trust and Nextensa

0.48

Correlation Coefficient

Immolease Trust  Nextensa

Very weak diversification

The 3 months correlation between Immolease and Nextensa is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Immolease Trust NV and Nextensa NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextensa NV and Immolease Trust 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 Immolease Trust NV are associated (or correlated) with Nextensa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextensa NV has no effect on the direction of Immolease Trust i.e., Immolease Trust and Nextensa go up and down completely randomly.

Pair Corralation between Immolease Trust and Nextensa

Assuming the 90 days trading horizon Immolease Trust NV is expected to generate 2.23 times more return on investment than Nextensa. However, Immolease Trust is 2.23 times more volatile than Nextensa NV. It trades about 0.01 of its potential returns per unit of risk. Nextensa NV is currently generating about -0.01 per unit of risk. If you would invest  11,286  in Immolease Trust NV on September 4, 2024 and sell it today you would lose (486.00) from holding Immolease Trust NV or give up 4.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.04%
Values	Daily Returns

Immolease Trust NV  vs.  Nextensa NV

Immolease Trust NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immolease Trust NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Nextensa NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextensa NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Immolease Trust and Nextensa

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

The idea behind Immolease Trust NV and Nextensa NV 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.