Correlation Between Galexxy Holdings and Nextmart
Can any of the company-specific risk be diversified away by investing in both Galexxy Holdings and Nextmart 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 Galexxy Holdings and Nextmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galexxy Holdings and Nextmart, you can compare the effects of market volatilities on Galexxy Holdings and Nextmart 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 Galexxy Holdings with a short position of Nextmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galexxy Holdings and Nextmart.
Diversification Opportunities for Galexxy Holdings and Nextmart
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Galexxy and Nextmart is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Galexxy Holdings and Nextmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextmart and Galexxy Holdings 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 Galexxy Holdings are associated (or correlated) with Nextmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextmart has no effect on the direction of Galexxy Holdings i.e., Galexxy Holdings and Nextmart go up and down completely randomly.
Pair Corralation between Galexxy Holdings and Nextmart
Given the investment horizon of 90 days Galexxy Holdings is expected to under-perform the Nextmart. But the pink sheet apears to be less risky and, when comparing its historical volatility, Galexxy Holdings is 11.82 times less risky than Nextmart. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Nextmart is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Nextmart on October 11, 2024 and sell it today you would earn a total of 0.02 from holding Nextmart or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Galexxy Holdings vs. Nextmart
Performance |
| Timeline |
| Galexxy Holdings |
| Nextmart |
Galexxy Holdings and Nextmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galexxy Holdings and Nextmart
The main advantage of trading using opposite Galexxy Holdings and Nextmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galexxy Holdings position performs unexpectedly, Nextmart 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 Nextmart will offset losses from the drop in Nextmart's long position.| Galexxy Holdings vs. Genesis Electronics Group | Galexxy Holdings vs. Nextmart | Galexxy Holdings vs. Emergent Health Corp | Galexxy Holdings vs. Goff Corp |
| Nextmart vs. Genesis Electronics Group | Nextmart vs. Industrial Nanotech | Nextmart vs. Intl Star | Nextmart vs. HeadsUp Entertainment International |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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