Correlation Between Nexam Chemical and Anoto Group
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Anoto Group 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 Anoto Group 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 Anoto Group AB, you can compare the effects of market volatilities on Nexam Chemical and Anoto Group 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 Anoto Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Anoto Group.
Diversification Opportunities for Nexam Chemical and Anoto Group
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nexam and Anoto is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Anoto Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anoto Group AB 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 Anoto Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anoto Group AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Anoto Group go up and down completely randomly.
Pair Corralation between Nexam Chemical and Anoto Group
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 0.54 times more return on investment than Anoto Group. However, Nexam Chemical Holding is 1.84 times less risky than Anoto Group. It trades about 0.04 of its potential returns per unit of risk. Anoto Group AB is currently generating about -0.02 per unit of risk. If you would invest 305.00 in Nexam Chemical Holding on August 29, 2024 and sell it today you would earn a total of 82.00 from holding Nexam Chemical Holding or generate 26.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexam Chemical Holding vs. Anoto Group AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| Anoto Group AB |
Nexam Chemical and Anoto Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Anoto Group
The main advantage of trading using opposite Nexam Chemical and Anoto Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, Anoto Group 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 Anoto Group will offset losses from the drop in Anoto Group's long position.| Nexam Chemical vs. Bjorn Borg AB | Nexam Chemical vs. Diadrom Holding AB | Nexam Chemical vs. Anoto Group AB | Nexam Chemical vs. Cloetta AB |
| Anoto Group vs. Enzymatica publ AB | Anoto Group vs. Polygiene AB | Anoto Group vs. Sprint Bioscience AB | Anoto Group vs. XMReality 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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