Correlation Between NextCell Pharma and Stille AB
Can any of the company-specific risk be diversified away by investing in both NextCell Pharma and Stille 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 Stille 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 Stille AB, you can compare the effects of market volatilities on NextCell Pharma and Stille 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 Stille AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCell Pharma and Stille AB.
Diversification Opportunities for NextCell Pharma and Stille AB
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NextCell and Stille is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NextCell Pharma AB and Stille AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stille 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 Stille AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stille AB has no effect on the direction of NextCell Pharma i.e., NextCell Pharma and Stille AB go up and down completely randomly.
Pair Corralation between NextCell Pharma and Stille AB
Assuming the 90 days trading horizon NextCell Pharma is expected to generate 4.16 times less return on investment than Stille AB. But when comparing it to its historical volatility, NextCell Pharma AB is 1.05 times less risky than Stille AB. It trades about 0.04 of its potential returns per unit of risk. Stille AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 20,800 in Stille AB on September 1, 2024 and sell it today you would earn a total of 1,200 from holding Stille AB or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NextCell Pharma AB vs. Stille AB
Performance |
| Timeline |
| NextCell Pharma AB |
| Stille AB |
NextCell Pharma and Stille AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NextCell Pharma and Stille AB
The main advantage of trading using opposite NextCell Pharma and Stille AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NextCell Pharma position performs unexpectedly, Stille 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 Stille AB will offset losses from the drop in Stille 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 |
| Stille AB vs. C Rad AB | Stille AB vs. CellaVision AB | Stille AB vs. Boule Diagnostics AB | Stille AB vs. Genovis 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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