Correlation Between Nexam Chemical and Swedencare Publ
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Swedencare Publ 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 Swedencare Publ 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 Swedencare publ AB, you can compare the effects of market volatilities on Nexam Chemical and Swedencare Publ 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 Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Swedencare Publ.
Diversification Opportunities for Nexam Chemical and Swedencare Publ
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nexam and Swedencare is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare publ 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 Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Swedencare Publ go up and down completely randomly.
Pair Corralation between Nexam Chemical and Swedencare Publ
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to under-perform the Swedencare Publ. In addition to that, Nexam Chemical is 2.29 times more volatile than Swedencare publ AB. It trades about -0.08 of its total potential returns per unit of risk. Swedencare publ AB is currently generating about 0.11 per unit of volatility. If you would invest 4,600 in Swedencare publ AB on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Swedencare publ AB or generate 2.35% 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. Swedencare publ AB
Performance |
| Timeline |
| Nexam Chemical Holding |
| Swedencare publ AB |
Nexam Chemical and Swedencare Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and Swedencare Publ
The main advantage of trading using opposite Nexam Chemical and Swedencare Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, Swedencare Publ 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 Swedencare Publ will offset losses from the drop in Swedencare Publ's long position.| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
| Swedencare Publ vs. Enzymatica publ AB | Swedencare Publ vs. KABE Group AB | Swedencare Publ vs. IAR Systems Group | Swedencare Publ vs. Mekonomen 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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