Correlation Between NextCell Pharma and Lipum AB
Can any of the company-specific risk be diversified away by investing in both NextCell Pharma and Lipum AB 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 Lipum AB 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 Lipum AB, you can compare the effects of market volatilities on NextCell Pharma and Lipum AB 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 Lipum AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCell Pharma and Lipum AB.
Diversification Opportunities for NextCell Pharma and Lipum AB
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NextCell and Lipum is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NextCell Pharma AB and Lipum AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipum AB 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 Lipum AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipum AB has no effect on the direction of NextCell Pharma i.e., NextCell Pharma and Lipum AB go up and down completely randomly.
Pair Corralation between NextCell Pharma and Lipum AB
Assuming the 90 days trading horizon NextCell Pharma AB is expected to generate 2.44 times more return on investment than Lipum AB. However, NextCell Pharma is 2.44 times more volatile than Lipum AB. It trades about 0.03 of its potential returns per unit of risk. Lipum AB is currently generating about 0.06 per unit of risk. If you would invest 300.00 in NextCell Pharma AB on October 21, 2024 and sell it today you would lose (60.00) from holding NextCell Pharma AB or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCell Pharma AB vs. Lipum AB
Performance |
| Timeline |
| NextCell Pharma AB |
| Lipum AB |
NextCell Pharma and Lipum AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCell Pharma and Lipum AB
The main advantage of trading using opposite NextCell Pharma and Lipum AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCell Pharma position performs unexpectedly, Lipum AB 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 Lipum AB will offset losses from the drop in Lipum AB's 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 |
| Lipum AB vs. Ascelia Pharma AB | Lipum AB vs. NextCell Pharma AB | Lipum AB vs. Annexin Pharmaceuticals AB | Lipum AB vs. AlzeCure Pharma |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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