Correlation Between Nexam Chemical and Ellen AB
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Ellen AB 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 Ellen AB 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 Ellen AB, you can compare the effects of market volatilities on Nexam Chemical and Ellen AB 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 Ellen AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Ellen AB.
Diversification Opportunities for Nexam Chemical and Ellen AB
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nexam and Ellen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Ellen AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ellen 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 Ellen AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ellen AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Ellen AB go up and down completely randomly.
Pair Corralation between Nexam Chemical and Ellen AB
Assuming the 90 days trading horizon Nexam Chemical is expected to generate 7.1 times less return on investment than Ellen AB. But when comparing it to its historical volatility, Nexam Chemical Holding is 2.2 times less risky than Ellen AB. It trades about 0.0 of its potential returns per unit of risk. Ellen AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 291.00 in Ellen AB on August 29, 2024 and sell it today you would lose (186.00) from holding Ellen AB or give up 63.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.39% |
| Values | Daily Returns |
Nexam Chemical Holding vs. Ellen AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| Ellen AB |
Nexam Chemical and Ellen AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Ellen AB
The main advantage of trading using opposite Nexam Chemical and Ellen AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, Ellen AB 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 Ellen AB will offset losses from the drop in Ellen AB'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 |
| Ellen AB vs. Mendus AB | Ellen AB vs. JonDeTech Sensors | Ellen AB vs. Nexam Chemical Holding | Ellen AB vs. Lohilo Foods 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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