Correlation Between Nexgel and Sanara Medtech
Can any of the company-specific risk be diversified away by investing in both Nexgel and Sanara Medtech 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 Sanara Medtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexgel Inc and Sanara Medtech, you can compare the effects of market volatilities on Nexgel and Sanara Medtech 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 Sanara Medtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexgel and Sanara Medtech.
Diversification Opportunities for Nexgel and Sanara Medtech
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nexgel and Sanara is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and Sanara Medtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanara Medtech 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 Sanara Medtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanara Medtech has no effect on the direction of Nexgel i.e., Nexgel and Sanara Medtech go up and down completely randomly.
Pair Corralation between Nexgel and Sanara Medtech
Given the investment horizon of 90 days Nexgel Inc is expected to generate 1.33 times more return on investment than Sanara Medtech. However, Nexgel is 1.33 times more volatile than Sanara Medtech. It trades about 0.1 of its potential returns per unit of risk. Sanara Medtech is currently generating about 0.07 per unit of risk. If you would invest 206.00 in Nexgel Inc on August 28, 2024 and sell it today you would earn a total of 131.00 from holding Nexgel Inc or generate 63.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nexgel Inc vs. Sanara Medtech
Performance |
| Timeline |
| Nexgel Inc |
| Sanara Medtech |
Nexgel and Sanara Medtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexgel and Sanara Medtech
The main advantage of trading using opposite Nexgel and Sanara Medtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexgel position performs unexpectedly, Sanara Medtech 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 Sanara Medtech will offset losses from the drop in Sanara Medtech's long position.The idea behind Nexgel Inc and Sanara Medtech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sanara Medtech vs. InfuSystems Holdings | Sanara Medtech vs. Pro Dex | Sanara Medtech vs. LeMaitre Vascular | Sanara Medtech vs. Utah Medical 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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