Correlation Between Impero AS and Nexcom AS
Can any of the company-specific risk be diversified away by investing in both Impero AS 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 Impero AS and Nexcom AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impero AS and Nexcom AS, you can compare the effects of market volatilities on Impero AS 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 Impero AS with a short position of Nexcom AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impero AS and Nexcom AS.
Diversification Opportunities for Impero AS and Nexcom AS
Good diversification
The 3 months correlation between Impero and Nexcom is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Impero AS and Nexcom AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexcom AS and Impero AS 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 Impero 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 Impero AS i.e., Impero AS and Nexcom AS go up and down completely randomly.
Pair Corralation between Impero AS and Nexcom AS
Assuming the 90 days trading horizon Impero AS is expected to generate 0.85 times more return on investment than Nexcom AS. However, Impero AS is 1.18 times less risky than Nexcom AS. It trades about 0.12 of its potential returns per unit of risk. Nexcom AS is currently generating about -0.03 per unit of risk. If you would invest 468.00 in Impero AS on August 25, 2024 and sell it today you would earn a total of 82.00 from holding Impero AS or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impero AS vs. Nexcom AS
Performance |
| Timeline |
| Impero AS |
| Nexcom AS |
Impero AS and Nexcom AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impero AS and Nexcom AS
The main advantage of trading using opposite Impero AS and Nexcom AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impero AS 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.The idea behind Impero AS and Nexcom AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nexcom AS vs. Bactiquant AS | Nexcom AS vs. Penneo AS | Nexcom AS vs. Dataproces Group AS | Nexcom AS vs. DecideAct AS |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |