Correlation Between Egetis Therapeutics and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Egetis Therapeutics 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 Egetis Therapeutics and NextCell Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Egetis Therapeutics AB and NextCell Pharma AB, you can compare the effects of market volatilities on Egetis Therapeutics 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 Egetis Therapeutics with a short position of NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Egetis Therapeutics and NextCell Pharma.
Diversification Opportunities for Egetis Therapeutics and NextCell Pharma
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Egetis and NextCell is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Egetis Therapeutics 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 Egetis Therapeutics 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 Egetis Therapeutics 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 Egetis Therapeutics i.e., Egetis Therapeutics and NextCell Pharma go up and down completely randomly.
Pair Corralation between Egetis Therapeutics and NextCell Pharma
Assuming the 90 days trading horizon Egetis Therapeutics is expected to generate 1.7 times less return on investment than NextCell Pharma. But when comparing it to its historical volatility, Egetis Therapeutics AB is 1.91 times less risky than NextCell Pharma. It trades about 0.02 of its potential returns per unit of risk. NextCell Pharma AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 635.00 in NextCell Pharma AB on November 27, 2024 and sell it today you would lose (305.00) from holding NextCell Pharma AB or give up 48.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Egetis Therapeutics AB vs. NextCell Pharma AB
Performance |
| Timeline |
| Egetis Therapeutics |
| NextCell Pharma AB |
Egetis Therapeutics and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Egetis Therapeutics and NextCell Pharma
The main advantage of trading using opposite Egetis Therapeutics and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Egetis Therapeutics 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.| Egetis Therapeutics vs. BioInvent International AB | Egetis Therapeutics vs. BioArctic AB | Egetis Therapeutics vs. Hansa Biopharma AB | Egetis Therapeutics vs. Vicore Pharma Holding |
| NextCell Pharma vs. Diamyd Medical AB | NextCell Pharma vs. Mendus AB | NextCell Pharma vs. Vicore Pharma Holding | NextCell Pharma vs. Immunovia publ 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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