Correlation Between Nexgel and TransMedics
Can any of the company-specific risk be diversified away by investing in both Nexgel and TransMedics 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 TransMedics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexgel Inc and TransMedics Group, you can compare the effects of market volatilities on Nexgel and TransMedics 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 TransMedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexgel and TransMedics.
Diversification Opportunities for Nexgel and TransMedics
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nexgel and TransMedics is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and TransMedics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransMedics Group 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 TransMedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransMedics Group has no effect on the direction of Nexgel i.e., Nexgel and TransMedics go up and down completely randomly.
Pair Corralation between Nexgel and TransMedics
Given the investment horizon of 90 days Nexgel Inc is expected to generate 1.2 times more return on investment than TransMedics. However, Nexgel is 1.2 times more volatile than TransMedics Group. It trades about 0.16 of its potential returns per unit of risk. TransMedics Group is currently generating about 0.09 per unit of risk. If you would invest 288.00 in Nexgel Inc on August 31, 2024 and sell it today you would earn a total of 44.00 from holding Nexgel Inc or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexgel Inc vs. TransMedics Group
Performance |
| Timeline |
| Nexgel Inc |
| TransMedics Group |
Nexgel and TransMedics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexgel and TransMedics
The main advantage of trading using opposite Nexgel and TransMedics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexgel position performs unexpectedly, TransMedics 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 TransMedics will offset losses from the drop in TransMedics' long position.| Nexgel vs. GlucoTrack | Nexgel vs. Predictive Oncology | Nexgel vs. Pro Dex | Nexgel vs. JIN MEDICAL INTERNATIONAL |
| TransMedics vs. Inspire Medical Systems | TransMedics vs. Inari Medical | TransMedics vs. InMode | TransMedics vs. Insulet |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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