Correlation Between Swan Defined and Neiman Large

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

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

Diversification Opportunities for Swan Defined and Neiman Large

0.99

Correlation Coefficient

Swan Defined  Neiman Large

No risk reduction

The 3 months correlation between Swan and Neiman is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk and Neiman Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neiman Large Cap and Swan Defined 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 Swan Defined Risk are associated (or correlated) with Neiman Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neiman Large Cap has no effect on the direction of Swan Defined i.e., Swan Defined and Neiman Large go up and down completely randomly.

Pair Corralation between Swan Defined and Neiman Large

Assuming the 90 days horizon Swan Defined is expected to generate 1.12 times less return on investment than Neiman Large. But when comparing it to its historical volatility, Swan Defined Risk is 1.15 times less risky than Neiman Large. It trades about 0.1 of its potential returns per unit of risk. Neiman Large Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,460  in Neiman Large Cap on July 21, 2025 and sell it today you would earn a total of  1,115  from holding Neiman Large Cap or generate 45.33% return on investment over 90 days.

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

Swan Defined Risk  vs.  Neiman Large Cap

Swan Defined Risk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swan Defined Risk are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Swan Defined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Neiman Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Neiman Large Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Neiman Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Swan Defined and Neiman Large

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

The idea behind Swan Defined Risk and Neiman Large Cap 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.