Correlation Between Nexters Warrant and Paramount Global

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

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

Diversification Opportunities for Nexters Warrant and Paramount Global

-0.08

Correlation Coefficient

Nexters Warrant  Paramount Global

Good diversification

The 3 months correlation between Nexters and Paramount is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nexters Warrant and Paramount Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global Class and Nexters Warrant 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 Nexters Warrant are associated (or correlated) with Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global Class has no effect on the direction of Nexters Warrant i.e., Nexters Warrant and Paramount Global go up and down completely randomly.

Pair Corralation between Nexters Warrant and Paramount Global

Assuming the 90 days horizon Nexters Warrant is expected to generate 6.95 times more return on investment than Paramount Global. However, Nexters Warrant is 6.95 times more volatile than Paramount Global Class. It trades about -0.01 of its potential returns per unit of risk. Paramount Global Class is currently generating about -0.08 per unit of risk. If you would invest  2.68  in Nexters Warrant on May 6, 2025 and sell it today you would lose (1.09) from holding Nexters Warrant or give up 40.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.23%
Values	Daily Returns

Nexters Warrant  vs.  Paramount Global Class

Nexters Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexters Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nexters Warrant is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Paramount Global Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paramount Global Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators 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 Nexters Warrant and Paramount Global

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

The idea behind Nexters Warrant and Paramount Global Class 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.