Correlation Between Nextage Therapeutics and Clal Industries
Can any of the company-specific risk be diversified away by investing in both Nextage Therapeutics and Clal Industries 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 Nextage Therapeutics and Clal Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextage Therapeutics and Clal Industries and, you can compare the effects of market volatilities on Nextage Therapeutics and Clal Industries 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 Nextage Therapeutics with a short position of Clal Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextage Therapeutics and Clal Industries.
Diversification Opportunities for Nextage Therapeutics and Clal Industries
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nextage and Clal is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nextage Therapeutics and Clal Industries and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Industries and Nextage Therapeutics 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 Nextage Therapeutics are associated (or correlated) with Clal Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Industries has no effect on the direction of Nextage Therapeutics i.e., Nextage Therapeutics and Clal Industries go up and down completely randomly.
Pair Corralation between Nextage Therapeutics and Clal Industries
Assuming the 90 days trading horizon Nextage Therapeutics is expected to generate 3.53 times more return on investment than Clal Industries. However, Nextage Therapeutics is 3.53 times more volatile than Clal Industries and. It trades about 0.05 of its potential returns per unit of risk. Clal Industries and is currently generating about 0.02 per unit of risk. If you would invest 5,500 in Nextage Therapeutics on September 12, 2024 and sell it today you would earn a total of 2,260 from holding Nextage Therapeutics or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextage Therapeutics vs. Clal Industries and
Performance |
| Timeline |
| Nextage Therapeutics |
| Clal Industries |
Nextage Therapeutics and Clal Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextage Therapeutics and Clal Industries
The main advantage of trading using opposite Nextage Therapeutics and Clal Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextage Therapeutics position performs unexpectedly, Clal Industries 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 Clal Industries will offset losses from the drop in Clal Industries' long position.| Nextage Therapeutics vs. Ram On Investments and | Nextage Therapeutics vs. Imed Infinity Medical Limited | Nextage Therapeutics vs. Tower Semiconductor | Nextage Therapeutics vs. Isras Investment |
| Clal Industries vs. Bio Meat Foodtech | Clal Industries vs. Orbit Technologies | Clal Industries vs. Dan Hotels | Clal Industries vs. Storage Drop Storage |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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