Correlation Between AcadeMedia and Nexam Chemical
Can any of the company-specific risk be diversified away by investing in both AcadeMedia 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 AcadeMedia and Nexam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Nexam Chemical Holding, you can compare the effects of market volatilities on AcadeMedia 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 AcadeMedia with a short position of Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Nexam Chemical.
Diversification Opportunities for AcadeMedia and Nexam Chemical
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between AcadeMedia and Nexam is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia 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 AcadeMedia 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 AcadeMedia 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 AcadeMedia i.e., AcadeMedia and Nexam Chemical go up and down completely randomly.
Pair Corralation between AcadeMedia and Nexam Chemical
Assuming the 90 days trading horizon AcadeMedia AB is expected to under-perform the Nexam Chemical. But the stock apears to be less risky and, when comparing its historical volatility, AcadeMedia AB is 2.28 times less risky than Nexam Chemical. The stock trades about -0.28 of its potential returns per unit of risk. The Nexam Chemical Holding is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 420.00 in Nexam Chemical Holding on August 29, 2024 and sell it today you would lose (20.00) from holding Nexam Chemical Holding or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Nexam Chemical Holding
Performance |
| Timeline |
| AcadeMedia AB |
| Nexam Chemical Holding |
AcadeMedia and Nexam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Nexam Chemical
The main advantage of trading using opposite AcadeMedia and Nexam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia 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.| AcadeMedia vs. Inwido AB | AcadeMedia vs. Alimak Hek Group | AcadeMedia vs. Dometic Group AB | AcadeMedia vs. Byggmax Group AB |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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