Correlation Between ICU Medical and Nexgel
Can any of the company-specific risk be diversified away by investing in both ICU Medical and Nexgel 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 ICU Medical and Nexgel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICU Medical and Nexgel Inc, you can compare the effects of market volatilities on ICU Medical and Nexgel 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 ICU Medical with a short position of Nexgel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICU Medical and Nexgel.
Diversification Opportunities for ICU Medical and Nexgel
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ICU and Nexgel is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ICU Medical and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc and ICU Medical 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 ICU Medical are associated (or correlated) with Nexgel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexgel Inc has no effect on the direction of ICU Medical i.e., ICU Medical and Nexgel go up and down completely randomly.
Pair Corralation between ICU Medical and Nexgel
Given the investment horizon of 90 days ICU Medical is expected to under-perform the Nexgel. But the stock apears to be less risky and, when comparing its historical volatility, ICU Medical is 3.47 times less risky than Nexgel. The stock trades about -0.11 of its potential returns per unit of risk. The Nexgel Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 295.00 in Nexgel Inc on August 28, 2024 and sell it today you would earn a total of 42.00 from holding Nexgel Inc or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICU Medical vs. Nexgel Inc
Performance |
| Timeline |
| ICU Medical |
| Nexgel Inc |
ICU Medical and Nexgel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICU Medical and Nexgel
The main advantage of trading using opposite ICU Medical and Nexgel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICU Medical position performs unexpectedly, Nexgel 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 Nexgel will offset losses from the drop in Nexgel's long position.| ICU Medical vs. Merit Medical Systems | ICU Medical vs. The Cooper Companies, | ICU Medical vs. AngioDynamics | ICU Medical vs. AptarGroup |
| Nexgel vs. Heartbeam | Nexgel vs. EUDA Health Holdings | Nexgel vs. Nutex Health | Nexgel vs. Healthcare Triangle |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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