Correlation Between NextCell Pharma and Dow Jones
Can any of the company-specific risk be diversified away by investing in both NextCell Pharma and Dow Jones 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 NextCell Pharma and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NextCell Pharma AB and Dow Jones Industrial, you can compare the effects of market volatilities on NextCell Pharma and Dow Jones 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 NextCell Pharma with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCell Pharma and Dow Jones.
Diversification Opportunities for NextCell Pharma and Dow Jones
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NextCell and Dow is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NextCell Pharma AB and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and NextCell Pharma 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 NextCell Pharma AB are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of NextCell Pharma i.e., NextCell Pharma and Dow Jones go up and down completely randomly.
Pair Corralation between NextCell Pharma and Dow Jones
Assuming the 90 days trading horizon NextCell Pharma is expected to generate 5.36 times less return on investment than Dow Jones. In addition to that, NextCell Pharma is 1.89 times more volatile than Dow Jones Industrial. It trades about 0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
NextCell Pharma AB vs. Dow Jones Industrial
Performance |
| Timeline |
NextCell Pharma and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
NextCell Pharma AB
Pair trading matchups for NextCell Pharma
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NextCell Pharma and Dow Jones
The main advantage of trading using opposite NextCell Pharma and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCell Pharma position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| NextCell Pharma vs. Diamyd Medical AB | NextCell Pharma vs. Mendus AB | NextCell Pharma vs. Vicore Pharma Holding | NextCell Pharma vs. Immunovia publ AB |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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