Correlation Between Nexam Chemical and White Pearl
Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and White Pearl 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 White Pearl 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 White Pearl Technology, you can compare the effects of market volatilities on Nexam Chemical and White Pearl 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 White Pearl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and White Pearl.
Diversification Opportunities for Nexam Chemical and White Pearl
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nexam and White is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and White Pearl Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Pearl Technology 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 White Pearl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Pearl Technology has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and White Pearl go up and down completely randomly.
Pair Corralation between Nexam Chemical and White Pearl
Assuming the 90 days trading horizon Nexam Chemical Holding is expected to under-perform the White Pearl. But the stock apears to be less risky and, when comparing its historical volatility, Nexam Chemical Holding is 2.91 times less risky than White Pearl. The stock trades about -0.05 of its potential returns per unit of risk. The White Pearl Technology is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 352.00 in White Pearl Technology on September 2, 2024 and sell it today you would earn a total of 244.00 from holding White Pearl Technology or generate 69.32% 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. White Pearl Technology
Performance |
| Timeline |
| Nexam Chemical Holding |
| White Pearl Technology |
Nexam Chemical and White Pearl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexam Chemical and White Pearl
The main advantage of trading using opposite Nexam Chemical and White Pearl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexam Chemical position performs unexpectedly, White Pearl 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 White Pearl will offset losses from the drop in White Pearl's long position.| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
| White Pearl vs. AstraZeneca PLC | White Pearl vs. Investor AB ser | White Pearl vs. Investor AB ser | White Pearl vs. Atlas Copco 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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