Correlation Between Nexgel and Globus Medical
Can any of the company-specific risk be diversified away by investing in both Nexgel and Globus 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 Nexgel and Globus Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexgel Inc and Globus Medical, you can compare the effects of market volatilities on Nexgel and Globus 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 Nexgel with a short position of Globus Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexgel and Globus Medical.
Diversification Opportunities for Nexgel and Globus Medical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nexgel and Globus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and Globus Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Medical and Nexgel 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 Nexgel Inc are associated (or correlated) with Globus Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Medical has no effect on the direction of Nexgel i.e., Nexgel and Globus Medical go up and down completely randomly.
Pair Corralation between Nexgel and Globus Medical
Given the investment horizon of 90 days Nexgel Inc is expected to generate 2.42 times more return on investment than Globus Medical. However, Nexgel is 2.42 times more volatile than Globus Medical. It trades about 0.04 of its potential returns per unit of risk. Globus Medical is currently generating about 0.07 per unit of risk. If you would invest 226.00 in Nexgel Inc on August 31, 2024 and sell it today you would earn a total of 92.00 from holding Nexgel Inc or generate 40.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexgel Inc vs. Globus Medical
Performance |
| Timeline |
| Nexgel Inc |
| Globus Medical |
Nexgel and Globus Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexgel and Globus Medical
The main advantage of trading using opposite Nexgel and Globus Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexgel position performs unexpectedly, Globus 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 Globus Medical will offset losses from the drop in Globus Medical's long position.| Nexgel vs. GlucoTrack | Nexgel vs. Predictive Oncology | Nexgel vs. Pro Dex | Nexgel vs. JIN MEDICAL INTERNATIONAL |
| Globus Medical vs. Orthofix Medical | Globus Medical vs. CONMED | Globus Medical vs. Alphatec Holdings | Globus Medical vs. LivaNova PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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