Correlation Between Nextferm Technologies and Photomyne
Can any of the company-specific risk be diversified away by investing in both Nextferm Technologies and Photomyne 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 Nextferm Technologies and Photomyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextferm Technologies and Photomyne, you can compare the effects of market volatilities on Nextferm Technologies and Photomyne 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 Nextferm Technologies with a short position of Photomyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextferm Technologies and Photomyne.
Diversification Opportunities for Nextferm Technologies and Photomyne
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nextferm and Photomyne is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nextferm Technologies and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne and Nextferm Technologies 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 Nextferm Technologies are associated (or correlated) with Photomyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photomyne has no effect on the direction of Nextferm Technologies i.e., Nextferm Technologies and Photomyne go up and down completely randomly.
Pair Corralation between Nextferm Technologies and Photomyne
Assuming the 90 days trading horizon Nextferm Technologies is expected to under-perform the Photomyne. In addition to that, Nextferm Technologies is 2.3 times more volatile than Photomyne. It trades about -0.05 of its total potential returns per unit of risk. Photomyne is currently generating about 0.08 per unit of volatility. If you would invest 187,800 in Photomyne on September 1, 2024 and sell it today you would earn a total of 90,800 from holding Photomyne or generate 48.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextferm Technologies vs. Photomyne
Performance |
| Timeline |
| Nextferm Technologies |
| Photomyne |
Nextferm Technologies and Photomyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextferm Technologies and Photomyne
The main advantage of trading using opposite Nextferm Technologies and Photomyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextferm Technologies position performs unexpectedly, Photomyne 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 Photomyne will offset losses from the drop in Photomyne's long position.| Nextferm Technologies vs. Neto ME Holdings | Nextferm Technologies vs. Salomon A Angel | Nextferm Technologies vs. Strauss Group | Nextferm Technologies vs. Gan Shmuel |
| Photomyne vs. Clal Biotechnology Industries | Photomyne vs. Hiron Trade Investments Industrial | Photomyne vs. Millennium Food Tech LP | Photomyne vs. Retailors |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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