Correlation Between Anoto Group and Nexam Chemical
Can any of the company-specific risk be diversified away by investing in both Anoto Group 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 Anoto Group and Nexam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anoto Group AB and Nexam Chemical Holding, you can compare the effects of market volatilities on Anoto Group 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 Anoto Group with a short position of Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anoto Group and Nexam Chemical.
Diversification Opportunities for Anoto Group and Nexam Chemical
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Anoto and Nexam is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Anoto Group 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 Anoto Group 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 Anoto Group 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 Anoto Group i.e., Anoto Group and Nexam Chemical go up and down completely randomly.
Pair Corralation between Anoto Group and Nexam Chemical
Assuming the 90 days trading horizon Anoto Group is expected to generate 1.65 times less return on investment than Nexam Chemical. In addition to that, Anoto Group is 2.65 times more volatile than Nexam Chemical Holding. It trades about 0.02 of its total potential returns per unit of risk. Nexam Chemical Holding is currently generating about 0.08 per unit of volatility. If you would invest 305.00 in Nexam Chemical Holding on September 1, 2024 and sell it today you would earn a total of 94.00 from holding Nexam Chemical Holding or generate 30.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Anoto Group AB vs. Nexam Chemical Holding
Performance |
| Timeline |
| Anoto Group AB |
| Nexam Chemical Holding |
Anoto Group and Nexam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anoto Group and Nexam Chemical
The main advantage of trading using opposite Anoto Group and Nexam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anoto Group 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.| Anoto Group vs. Precise Biometrics AB | Anoto Group vs. Fingerprint Cards AB | Anoto Group vs. BioInvent International AB | Anoto Group vs. Bong AB |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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