Correlation Between Neogen and Flexible Solutions
Can any of the company-specific risk be diversified away by investing in both Neogen and Flexible Solutions 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 Neogen and Flexible Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neogen and Flexible Solutions International, you can compare the effects of market volatilities on Neogen and Flexible Solutions 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 Neogen with a short position of Flexible Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogen and Flexible Solutions.
Diversification Opportunities for Neogen and Flexible Solutions
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neogen and Flexible is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Neogen and Flexible Solutions Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexible Solutions and Neogen 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 Neogen are associated (or correlated) with Flexible Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexible Solutions has no effect on the direction of Neogen i.e., Neogen and Flexible Solutions go up and down completely randomly.
Pair Corralation between Neogen and Flexible Solutions
Given the investment horizon of 90 days Neogen is expected to generate 8.14 times less return on investment than Flexible Solutions. But when comparing it to its historical volatility, Neogen is 1.36 times less risky than Flexible Solutions. It trades about 0.02 of its potential returns per unit of risk. Flexible Solutions International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 218.00 in Flexible Solutions International on August 30, 2024 and sell it today you would earn a total of 187.00 from holding Flexible Solutions International or generate 85.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neogen vs. Flexible Solutions Internation
Performance |
| Timeline |
| Neogen |
| Flexible Solutions |
Neogen and Flexible Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neogen and Flexible Solutions
The main advantage of trading using opposite Neogen and Flexible Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neogen position performs unexpectedly, Flexible Solutions 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 Flexible Solutions will offset losses from the drop in Flexible Solutions' long position.| Neogen vs. ReShape Lifesciences | Neogen vs. Bone Biologics Corp | Neogen vs. Tivic Health Systems | Neogen vs. Nuwellis |
| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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