Correlation Between Nexalin Technology and IRIDEX
Can any of the company-specific risk be diversified away by investing in both Nexalin Technology and IRIDEX 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 Nexalin Technology and IRIDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexalin Technology and IRIDEX, you can compare the effects of market volatilities on Nexalin Technology and IRIDEX 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 Nexalin Technology with a short position of IRIDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexalin Technology and IRIDEX.
Diversification Opportunities for Nexalin Technology and IRIDEX
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nexalin and IRIDEX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nexalin Technology and IRIDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRIDEX and Nexalin Technology 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 Nexalin Technology are associated (or correlated) with IRIDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRIDEX has no effect on the direction of Nexalin Technology i.e., Nexalin Technology and IRIDEX go up and down completely randomly.
Pair Corralation between Nexalin Technology and IRIDEX
Considering the 90-day investment horizon Nexalin Technology is expected to generate 1.29 times more return on investment than IRIDEX. However, Nexalin Technology is 1.29 times more volatile than IRIDEX. It trades about 0.32 of its potential returns per unit of risk. IRIDEX is currently generating about 0.08 per unit of risk. If you would invest 220.00 in Nexalin Technology on August 28, 2024 and sell it today you would earn a total of 170.00 from holding Nexalin Technology or generate 77.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nexalin Technology vs. IRIDEX
Performance |
| Timeline |
| Nexalin Technology |
| IRIDEX |
Nexalin Technology and IRIDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexalin Technology and IRIDEX
The main advantage of trading using opposite Nexalin Technology and IRIDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexalin Technology position performs unexpectedly, IRIDEX 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 IRIDEX will offset losses from the drop in IRIDEX's long position.| Nexalin Technology vs. Electromed | Nexalin Technology vs. Armm Inc | Nexalin Technology vs. SurModics | Nexalin Technology vs. Bluejay Diagnostics |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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