Correlation Between Nexam Chemical and Genovis AB
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Genovis 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 Genovis 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 Genovis AB, you can compare the effects of market volatilities on Nexam Chemical and Genovis 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 Genovis AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Genovis AB.
Diversification Opportunities for Nexam Chemical and Genovis AB
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexam and Genovis is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Genovis AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genovis 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 Genovis AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genovis AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Genovis AB go up and down completely randomly.
Pair Corralation between Nexam Chemical and Genovis AB
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to under-perform the Genovis AB. But the stock apears to be less risky and, when comparing its historical volatility, Nexam Chemical Holding is 2.66 times less risky than Genovis AB. The stock trades about -0.08 of its potential returns per unit of risk. The Genovis AB is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,210 in Genovis AB on August 28, 2024 and sell it today you would earn a total of 565.00 from holding Genovis AB or generate 25.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexam Chemical Holding vs. Genovis AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| Genovis AB |
Nexam Chemical and Genovis AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Genovis AB
The main advantage of trading using opposite Nexam Chemical and Genovis AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, Genovis 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 Genovis AB will offset losses from the drop in Genovis AB's long position.| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
| Genovis AB vs. Systemair AB | Genovis AB vs. Upsales Technology AB | Genovis AB vs. FormPipe Software AB | Genovis AB vs. White Pearl Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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