Correlation Between NextCell Pharma and Lipigon Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both NextCell Pharma and Lipigon Pharmaceuticals 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 Lipigon Pharmaceuticals 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 Lipigon Pharmaceuticals AB, you can compare the effects of market volatilities on NextCell Pharma and Lipigon Pharmaceuticals 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 Lipigon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCell Pharma and Lipigon Pharmaceuticals.
Diversification Opportunities for NextCell Pharma and Lipigon Pharmaceuticals
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NextCell and Lipigon is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding NextCell Pharma AB and Lipigon Pharmaceuticals AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipigon Pharmaceuticals 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 Lipigon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipigon Pharmaceuticals has no effect on the direction of NextCell Pharma i.e., NextCell Pharma and Lipigon Pharmaceuticals go up and down completely randomly.
Pair Corralation between NextCell Pharma and Lipigon Pharmaceuticals
Assuming the 90 days trading horizon NextCell Pharma AB is expected to generate 0.43 times more return on investment than Lipigon Pharmaceuticals. However, NextCell Pharma AB is 2.33 times less risky than Lipigon Pharmaceuticals. It trades about 0.19 of its potential returns per unit of risk. Lipigon Pharmaceuticals AB is currently generating about -0.1 per unit of risk. If you would invest 286.00 in NextCell Pharma AB on November 28, 2024 and sell it today you would earn a total of 42.00 from holding NextCell Pharma AB or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NextCell Pharma AB vs. Lipigon Pharmaceuticals AB
Performance |
| Timeline |
| NextCell Pharma AB |
| Lipigon Pharmaceuticals |
NextCell Pharma and Lipigon Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCell Pharma and Lipigon Pharmaceuticals
The main advantage of trading using opposite NextCell Pharma and Lipigon Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCell Pharma position performs unexpectedly, Lipigon Pharmaceuticals 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 Lipigon Pharmaceuticals will offset losses from the drop in Lipigon Pharmaceuticals' 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 |
| Lipigon Pharmaceuticals vs. Sprint Bioscience AB | Lipigon Pharmaceuticals vs. BioArctic AB | Lipigon Pharmaceuticals vs. Veg of Lund | Lipigon Pharmaceuticals vs. Ascelia Pharma AB |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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