Correlation Between Nextensa and Sequana Medical
Can any of the company-specific risk be diversified away by investing in both Nextensa and Sequana Medical 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 Nextensa and Sequana Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextensa NV and Sequana Medical NV, you can compare the effects of market volatilities on Nextensa and Sequana Medical 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 Nextensa with a short position of Sequana Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextensa and Sequana Medical.
Diversification Opportunities for Nextensa and Sequana Medical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nextensa and Sequana is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nextensa NV and Sequana Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequana Medical NV and Nextensa 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 Nextensa NV are associated (or correlated) with Sequana Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequana Medical NV has no effect on the direction of Nextensa i.e., Nextensa and Sequana Medical go up and down completely randomly.
Pair Corralation between Nextensa and Sequana Medical
Assuming the 90 days trading horizon Nextensa NV is expected to generate 0.18 times more return on investment than Sequana Medical. However, Nextensa NV is 5.45 times less risky than Sequana Medical. It trades about -0.39 of its potential returns per unit of risk. Sequana Medical NV is currently generating about -0.09 per unit of risk. If you would invest 4,290 in Nextensa NV on September 12, 2024 and sell it today you would lose (490.00) from holding Nextensa NV or give up 11.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextensa NV vs. Sequana Medical NV
Performance |
| Timeline |
| Nextensa NV |
| Sequana Medical NV |
Nextensa and Sequana Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextensa and Sequana Medical
The main advantage of trading using opposite Nextensa and Sequana Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextensa position performs unexpectedly, Sequana Medical 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 Sequana Medical will offset losses from the drop in Sequana Medical's long position.| Nextensa vs. Exmar NV | Nextensa vs. Iep Invest | Nextensa vs. Unifiedpost Group SA | Nextensa vs. Montea CVA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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