Correlation Between NEXE Innovations and Imaflex
Can any of the company-specific risk be diversified away by investing in both NEXE Innovations and Imaflex 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 Imaflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXE Innovations and Imaflex, you can compare the effects of market volatilities on NEXE Innovations and Imaflex 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 Imaflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXE Innovations and Imaflex.
Diversification Opportunities for NEXE Innovations and Imaflex
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NEXE and Imaflex is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding NEXE Innovations and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex 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 Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of NEXE Innovations i.e., NEXE Innovations and Imaflex go up and down completely randomly.
Pair Corralation between NEXE Innovations and Imaflex
Assuming the 90 days horizon NEXE Innovations is expected to generate 1.8 times more return on investment than Imaflex. However, NEXE Innovations is 1.8 times more volatile than Imaflex. It trades about 0.05 of its potential returns per unit of risk. Imaflex is currently generating about 0.06 per unit of risk. If you would invest 18.00 in NEXE Innovations on November 3, 2024 and sell it today you would earn a total of 6.00 from holding NEXE Innovations or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
NEXE Innovations vs. Imaflex
Performance |
| Timeline |
| NEXE Innovations |
| Imaflex |
NEXE Innovations and Imaflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXE Innovations and Imaflex
The main advantage of trading using opposite NEXE Innovations and Imaflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXE Innovations position performs unexpectedly, Imaflex 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 Imaflex will offset losses from the drop in Imaflex's long position.| NEXE Innovations vs. Imaflex | NEXE Innovations vs. Karat Packaging | NEXE Innovations vs. DSS Inc | NEXE Innovations vs. Myers Industries |
| Imaflex vs. Karat Packaging | Imaflex vs. NEXE Innovations | Imaflex vs. DSS Inc | Imaflex vs. Silgan Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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