Correlation Between FOM Technologies and Nexcom AS
Can any of the company-specific risk be diversified away by investing in both FOM Technologies and Nexcom 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 FOM Technologies and Nexcom AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOM Technologies AS and Nexcom AS, you can compare the effects of market volatilities on FOM Technologies and Nexcom 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 FOM Technologies with a short position of Nexcom AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and Nexcom AS.
Diversification Opportunities for FOM Technologies and Nexcom AS
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FOM and Nexcom is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS and Nexcom AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexcom AS and FOM Technologies 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 FOM Technologies AS are associated (or correlated) with Nexcom AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexcom AS has no effect on the direction of FOM Technologies i.e., FOM Technologies and Nexcom AS go up and down completely randomly.
Pair Corralation between FOM Technologies and Nexcom AS
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the Nexcom AS. But the stock apears to be less risky and, when comparing its historical volatility, FOM Technologies AS is 2.29 times less risky than Nexcom AS. The stock trades about -0.3 of its potential returns per unit of risk. The Nexcom AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 474.00 in Nexcom AS on September 1, 2024 and sell it today you would lose (36.00) from holding Nexcom AS or give up 7.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. Nexcom AS
Performance |
| Timeline |
| FOM Technologies |
| Nexcom AS |
FOM Technologies and Nexcom AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and Nexcom AS
The main advantage of trading using opposite FOM Technologies and Nexcom AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies position performs unexpectedly, Nexcom 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 Nexcom AS will offset losses from the drop in Nexcom AS's long position.| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell AS |
| Nexcom AS vs. FOM Technologies AS | Nexcom AS vs. cBrain AS | Nexcom AS vs. Green Hydrogen Systems | Nexcom AS vs. BioPorto |
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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