Correlation Between Camurus AB and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Camurus AB and NextCell Pharma 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 Camurus AB and NextCell Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camurus AB and NextCell Pharma AB, you can compare the effects of market volatilities on Camurus AB and NextCell Pharma 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 Camurus AB with a short position of NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camurus AB and NextCell Pharma.
Diversification Opportunities for Camurus AB and NextCell Pharma
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Camurus and NextCell is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Camurus AB and NextCell Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCell Pharma AB and Camurus AB 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 Camurus AB are associated (or correlated) with NextCell Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCell Pharma AB has no effect on the direction of Camurus AB i.e., Camurus AB and NextCell Pharma go up and down completely randomly.
Pair Corralation between Camurus AB and NextCell Pharma
Assuming the 90 days trading horizon Camurus AB is expected to generate 1.06 times less return on investment than NextCell Pharma. But when comparing it to its historical volatility, Camurus AB is 1.7 times less risky than NextCell Pharma. It trades about 0.32 of its potential returns per unit of risk. NextCell Pharma AB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 286.00 in NextCell Pharma AB on November 27, 2024 and sell it today you would earn a total of 44.00 from holding NextCell Pharma AB or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camurus AB vs. NextCell Pharma AB
Performance |
| Timeline |
| Camurus AB |
| NextCell Pharma AB |
Camurus AB and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camurus AB and NextCell Pharma
The main advantage of trading using opposite Camurus AB and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camurus AB position performs unexpectedly, NextCell Pharma 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 NextCell Pharma will offset losses from the drop in NextCell Pharma's long position.| Camurus AB vs. BioArctic AB | Camurus AB vs. Oncopeptides AB | Camurus AB vs. Hansa Biopharma AB | Camurus AB vs. Swedish Orphan Biovitrum |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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