Correlation Between Nexam Chemical and Lyko Group
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Lyko 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 Lyko 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 Lyko Group A, you can compare the effects of market volatilities on Nexam Chemical and Lyko 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 Lyko Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Lyko Group.
Diversification Opportunities for Nexam Chemical and Lyko Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexam and Lyko is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Lyko Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyko Group A 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 Lyko Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyko Group A has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Lyko Group go up and down completely randomly.
Pair Corralation between Nexam Chemical and Lyko Group
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 0.79 times more return on investment than Lyko Group. However, Nexam Chemical Holding is 1.27 times less risky than Lyko Group. It trades about -0.02 of its potential returns per unit of risk. Lyko Group A is currently generating about -0.22 per unit of risk. If you would invest 406.00 in Nexam Chemical Holding on September 1, 2024 and sell it today you would lose (7.00) from holding Nexam Chemical Holding or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nexam Chemical Holding vs. Lyko Group A
Performance |
| Timeline |
| Nexam Chemical Holding |
| Lyko Group A |
Nexam Chemical and Lyko Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Lyko Group
The main advantage of trading using opposite Nexam Chemical and Lyko Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, Lyko 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 Lyko Group will offset losses from the drop in Lyko Group's long position.| Nexam Chemical vs. Holmen AB | Nexam Chemical vs. Svenska Cellulosa Aktiebolaget | Nexam Chemical vs. Husqvarna AB | Nexam Chemical vs. Alfa Laval AB |
| Lyko Group vs. Mendus AB | Lyko Group vs. JonDeTech Sensors | Lyko Group vs. Nexam Chemical Holding | Lyko Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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