Correlation Between Infant Bacterial and NextCell Pharma
Can any of the company-specific risk be diversified away by investing in both Infant Bacterial 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 Infant Bacterial and NextCell Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infant Bacterial Therapeutics and NextCell Pharma AB, you can compare the effects of market volatilities on Infant Bacterial 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 Infant Bacterial with a short position of NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infant Bacterial and NextCell Pharma.
Diversification Opportunities for Infant Bacterial and NextCell Pharma
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Infant and NextCell is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Infant Bacterial Therapeutics 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 Infant Bacterial 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 Infant Bacterial Therapeutics 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 Infant Bacterial i.e., Infant Bacterial and NextCell Pharma go up and down completely randomly.
Pair Corralation between Infant Bacterial and NextCell Pharma
Assuming the 90 days trading horizon Infant Bacterial Therapeutics is expected to generate 0.48 times more return on investment than NextCell Pharma. However, Infant Bacterial Therapeutics is 2.08 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 0.0 per unit of risk. If you would invest 5,020 in Infant Bacterial Therapeutics on September 1, 2024 and sell it today you would lose (1,080) from holding Infant Bacterial Therapeutics or give up 21.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infant Bacterial Therapeutics vs. NextCell Pharma AB
Performance |
| Timeline |
| Infant Bacterial |
| NextCell Pharma AB |
Infant Bacterial and NextCell Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infant Bacterial and NextCell Pharma
The main advantage of trading using opposite Infant Bacterial and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infant Bacterial 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.| Infant Bacterial vs. Hansa Biopharma AB | Infant Bacterial vs. Saniona AB | Infant Bacterial vs. Oncopeptides AB |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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