Correlation Between NEXE Innovations and Ball
Can any of the company-specific risk be diversified away by investing in both NEXE Innovations and Ball 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 NEXE Innovations and Ball into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXE Innovations and Ball Corporation, you can compare the effects of market volatilities on NEXE Innovations and Ball 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 NEXE Innovations with a short position of Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXE Innovations and Ball.
Diversification Opportunities for NEXE Innovations and Ball
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXE and Ball is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding NEXE Innovations and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball and NEXE Innovations 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 NEXE Innovations are associated (or correlated) with Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of NEXE Innovations i.e., NEXE Innovations and Ball go up and down completely randomly.
Pair Corralation between NEXE Innovations and Ball
Assuming the 90 days horizon NEXE Innovations is expected to generate 3.33 times more return on investment than Ball. However, NEXE Innovations is 3.33 times more volatile than Ball Corporation. It trades about 0.04 of its potential returns per unit of risk. Ball Corporation is currently generating about 0.02 per unit of risk. If you would invest 20.00 in NEXE Innovations on September 12, 2024 and sell it today you would earn a total of 8.00 from holding NEXE Innovations or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NEXE Innovations vs. Ball Corp.
Performance |
| Timeline |
| NEXE Innovations |
| Ball |
NEXE Innovations and Ball Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXE Innovations and Ball
The main advantage of trading using opposite NEXE Innovations and Ball positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXE Innovations position performs unexpectedly, Ball 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 Ball will offset losses from the drop in Ball's long position.| NEXE Innovations vs. Ball Corporation | NEXE Innovations vs. Sealed Air | NEXE Innovations vs. International Paper | NEXE Innovations vs. Avery Dennison Corp |
| Ball vs. Graphic Packaging Holding | Ball vs. Silgan Holdings | Ball vs. Sonoco Products | Ball vs. Reynolds Consumer Products |
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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