Correlation Between NexGel Warrant and Baxter International
Can any of the company-specific risk be diversified away by investing in both NexGel Warrant and Baxter International 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 Warrant and Baxter International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGel Warrant and Baxter International, you can compare the effects of market volatilities on NexGel Warrant and Baxter International 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 Warrant with a short position of Baxter International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGel Warrant and Baxter International.
Diversification Opportunities for NexGel Warrant and Baxter International
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between NexGel and Baxter is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NexGel Warrant and Baxter International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baxter International and NexGel Warrant 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 Warrant are associated (or correlated) with Baxter International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baxter International has no effect on the direction of NexGel Warrant i.e., NexGel Warrant and Baxter International go up and down completely randomly.
Pair Corralation between NexGel Warrant and Baxter International
Assuming the 90 days horizon NexGel Warrant is expected to generate 6.95 times more return on investment than Baxter International. However, NexGel Warrant is 6.95 times more volatile than Baxter International. It trades about 0.05 of its potential returns per unit of risk. Baxter International is currently generating about -0.24 per unit of risk. If you would invest 65.00 in NexGel Warrant on September 12, 2024 and sell it today you would lose (1.00) from holding NexGel Warrant or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGel Warrant vs. Baxter International
Performance |
| Timeline |
| NexGel Warrant |
| Baxter International |
NexGel Warrant and Baxter International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGel Warrant and Baxter International
The main advantage of trading using opposite NexGel Warrant and Baxter International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGel Warrant position performs unexpectedly, Baxter International 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 Baxter International will offset losses from the drop in Baxter International's long position.| NexGel Warrant vs. West Pharmaceutical Services | NexGel Warrant vs. ResMed Inc | NexGel Warrant vs. ICU Medical | NexGel Warrant vs. The Cooper Companies, |
| Baxter International vs. West Pharmaceutical Services | Baxter International vs. ResMed Inc | Baxter International vs. ICU Medical | Baxter International vs. The Cooper Companies, |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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