Correlation Between 24SevenOffice Scandinavia and Nexam Chemical
Can any of the company-specific risk be diversified away by investing in both 24SevenOffice Scandinavia and Nexam Chemical 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 24SevenOffice Scandinavia and Nexam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 24SevenOffice Scandinavia AB and Nexam Chemical Holding, you can compare the effects of market volatilities on 24SevenOffice Scandinavia and Nexam Chemical 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 24SevenOffice Scandinavia with a short position of Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of 24SevenOffice Scandinavia and Nexam Chemical.
Diversification Opportunities for 24SevenOffice Scandinavia and Nexam Chemical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 24SevenOffice and Nexam is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding 24SevenOffice Scandinavia AB and Nexam Chemical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexam Chemical Holding and 24SevenOffice Scandinavia 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 24SevenOffice Scandinavia AB are associated (or correlated) with Nexam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexam Chemical Holding has no effect on the direction of 24SevenOffice Scandinavia i.e., 24SevenOffice Scandinavia and Nexam Chemical go up and down completely randomly.
Pair Corralation between 24SevenOffice Scandinavia and Nexam Chemical
Assuming the 90 days trading horizon 24SevenOffice Scandinavia AB is expected to under-perform the Nexam Chemical. In addition to that, 24SevenOffice Scandinavia is 1.23 times more volatile than Nexam Chemical Holding. It trades about -0.1 of its total potential returns per unit of risk. Nexam Chemical Holding is currently generating about -0.07 per unit of volatility. If you would invest 424.00 in Nexam Chemical Holding on November 30, 2024 and sell it today you would lose (53.00) from holding Nexam Chemical Holding or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
24SevenOffice Scandinavia AB vs. Nexam Chemical Holding
Performance |
| Timeline |
| 24SevenOffice Scandinavia |
| Nexam Chemical Holding |
24SevenOffice Scandinavia and Nexam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 24SevenOffice Scandinavia and Nexam Chemical
The main advantage of trading using opposite 24SevenOffice Scandinavia and Nexam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 24SevenOffice Scandinavia position performs unexpectedly, Nexam Chemical 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 Nexam Chemical will offset losses from the drop in Nexam Chemical's long position.| 24SevenOffice Scandinavia vs. Neola Medical AB | 24SevenOffice Scandinavia vs. Viva Wine Group | 24SevenOffice Scandinavia vs. Upsales Technology AB | 24SevenOffice Scandinavia vs. Lundin Mining |
| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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