Correlation Between ChemoMetec and NKT AS
Can any of the company-specific risk be diversified away by investing in both ChemoMetec and NKT AS 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 ChemoMetec and NKT AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChemoMetec AS and NKT AS, you can compare the effects of market volatilities on ChemoMetec and NKT AS 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 ChemoMetec with a short position of NKT AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChemoMetec and NKT AS.
Diversification Opportunities for ChemoMetec and NKT AS
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ChemoMetec and NKT is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding ChemoMetec AS and NKT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NKT AS and ChemoMetec 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 ChemoMetec AS are associated (or correlated) with NKT AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NKT AS has no effect on the direction of ChemoMetec i.e., ChemoMetec and NKT AS go up and down completely randomly.
Pair Corralation between ChemoMetec and NKT AS
Assuming the 90 days trading horizon ChemoMetec AS is expected to generate 2.16 times more return on investment than NKT AS. However, ChemoMetec is 2.16 times more volatile than NKT AS. It trades about 0.12 of its potential returns per unit of risk. NKT AS is currently generating about 0.06 per unit of risk. If you would invest 48,760 in ChemoMetec AS on October 24, 2024 and sell it today you would earn a total of 2,890 from holding ChemoMetec AS or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChemoMetec AS vs. NKT AS
Performance |
| Timeline |
| ChemoMetec AS |
| NKT AS |
ChemoMetec and NKT AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChemoMetec and NKT AS
The main advantage of trading using opposite ChemoMetec and NKT AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChemoMetec position performs unexpectedly, NKT AS 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 NKT AS will offset losses from the drop in NKT AS's long position.| ChemoMetec vs. cBrain AS | ChemoMetec vs. Ambu AS | ChemoMetec vs. Genmab AS | ChemoMetec vs. Zealand Pharma AS |
| NKT AS vs. FLSmidth Co | NKT AS vs. GN Store Nord | NKT AS vs. DSV Panalpina AS | NKT AS vs. ROCKWOOL International AS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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