Correlation Between Nexam Chemical and Bonesupport Holding
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Bonesupport Holding 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 Bonesupport Holding 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 Bonesupport Holding AB, you can compare the effects of market volatilities on Nexam Chemical and Bonesupport Holding 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 Bonesupport Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Bonesupport Holding.
Diversification Opportunities for Nexam Chemical and Bonesupport Holding
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexam and Bonesupport is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Bonesupport Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonesupport Holding 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 Bonesupport Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonesupport Holding has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Bonesupport Holding go up and down completely randomly.
Pair Corralation between Nexam Chemical and Bonesupport Holding
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 1.67 times more return on investment than Bonesupport Holding. However, Nexam Chemical is 1.67 times more volatile than Bonesupport Holding AB. It trades about 0.01 of its potential returns per unit of risk. Bonesupport Holding AB is currently generating about -0.07 per unit of risk. If you would invest 385.00 in Nexam Chemical Holding on October 23, 2024 and sell it today you would lose (3.00) from holding Nexam Chemical Holding or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexam Chemical Holding vs. Bonesupport Holding AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| Bonesupport Holding |
Nexam Chemical and Bonesupport Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Bonesupport Holding
The main advantage of trading using opposite Nexam Chemical and Bonesupport Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, Bonesupport Holding 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 Bonesupport Holding will offset losses from the drop in Bonesupport Holding's long position.| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
| Bonesupport Holding vs. BioArctic AB | Bonesupport Holding vs. Camurus AB | Bonesupport Holding vs. Xvivo Perfusion AB | Bonesupport Holding vs. Surgical Science Sweden |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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