Correlation Between ONT and NANO

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

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

Diversification Opportunities for ONT and NANO

0.76

Correlation Coefficient

ONT  NANO

Poor diversification

The 3 months correlation between ONT and NANO is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ONT and NANO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NANO and ONT 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 ONT are associated (or correlated) with NANO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NANO has no effect on the direction of ONT i.e., ONT and NANO go up and down completely randomly.

Pair Corralation between ONT and NANO

Assuming the 90 days trading horizon ONT is expected to under-perform the NANO. In addition to that, ONT is 1.33 times more volatile than NANO. It trades about -0.04 of its total potential returns per unit of risk. NANO is currently generating about -0.01 per unit of volatility. If you would invest  97.00  in NANO on May 7, 2025 and sell it today you would lose (7.00) from holding NANO or give up 7.22% of portfolio value over 90 days.

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

ONT  vs.  NANO

ONT

Risk-Adjusted Performance

Weakest

Over the last 90 days ONT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for ONT shareholders.

NANO

Risk-Adjusted Performance

Weakest

Over the last 90 days NANO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, NANO is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ONT and NANO

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

The idea behind ONT and NANO 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.