Correlation Between NLIGHT and Turtle Beach
Can any of the company-specific risk be diversified away by investing in both NLIGHT and Turtle Beach 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 NLIGHT and Turtle Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between nLIGHT Inc and Turtle Beach, you can compare the effects of market volatilities on NLIGHT and Turtle Beach 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 NLIGHT with a short position of Turtle Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of NLIGHT and Turtle Beach.
Diversification Opportunities for NLIGHT and Turtle Beach
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NLIGHT and Turtle is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding nLIGHT Inc and Turtle Beach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach and NLIGHT 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 nLIGHT Inc are associated (or correlated) with Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach has no effect on the direction of NLIGHT i.e., NLIGHT and Turtle Beach go up and down completely randomly.
Pair Corralation between NLIGHT and Turtle Beach
Given the investment horizon of 90 days nLIGHT Inc is expected to generate 1.83 times more return on investment than Turtle Beach. However, NLIGHT is 1.83 times more volatile than Turtle Beach. It trades about 0.22 of its potential returns per unit of risk. Turtle Beach is currently generating about 0.18 per unit of risk. If you would invest 1,636 in nLIGHT Inc on June 3, 2025 and sell it today you would earn a total of 1,244 from holding nLIGHT Inc or generate 76.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
nLIGHT Inc vs. Turtle Beach
Performance |
| Timeline |
| nLIGHT Inc |
| Turtle Beach |
NLIGHT and Turtle Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NLIGHT and Turtle Beach
The main advantage of trading using opposite NLIGHT and Turtle Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NLIGHT position performs unexpectedly, Turtle Beach 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 Turtle Beach will offset losses from the drop in Turtle Beach's long position.The idea behind nLIGHT Inc and Turtle Beach 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.| Turtle Beach vs. SNDL Inc | Turtle Beach vs. Fomento Economico Mexicano | Turtle Beach vs. Anheuser Busch Inbev | Turtle Beach vs. Starbucks |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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