Correlation Between Nexam Chemical and EEducation Albert
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and EEducation Albert 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 Nexam Chemical and EEducation Albert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexam Chemical Holding and eEducation Albert AB, you can compare the effects of market volatilities on Nexam Chemical and EEducation Albert 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 Nexam Chemical with a short position of EEducation Albert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and EEducation Albert.
Diversification Opportunities for Nexam Chemical and EEducation Albert
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nexam and EEducation is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and eEducation Albert AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eEducation Albert and Nexam Chemical 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 Nexam Chemical Holding are associated (or correlated) with EEducation Albert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eEducation Albert has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and EEducation Albert go up and down completely randomly.
Pair Corralation between Nexam Chemical and EEducation Albert
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 1.35 times more return on investment than EEducation Albert. However, Nexam Chemical is 1.35 times more volatile than eEducation Albert AB. It trades about -0.05 of its potential returns per unit of risk. eEducation Albert AB is currently generating about -0.12 per unit of risk. If you would invest 401.00 in Nexam Chemical Holding on August 31, 2024 and sell it today you would lose (12.00) from holding Nexam Chemical Holding or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexam Chemical Holding vs. eEducation Albert AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| eEducation Albert |
Nexam Chemical and EEducation Albert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and EEducation Albert
The main advantage of trading using opposite Nexam Chemical and EEducation Albert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, EEducation Albert 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 EEducation Albert will offset losses from the drop in EEducation Albert's long position.| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
| EEducation Albert vs. Greater Than AB | EEducation Albert vs. Cint Group AB | EEducation Albert vs. Acconeer AB | EEducation Albert vs. IAR Systems Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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