Correlation Between Nextcom and Sofwave Medical
Can any of the company-specific risk be diversified away by investing in both Nextcom and Sofwave Medical 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 Nextcom and Sofwave Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextcom and Sofwave Medical, you can compare the effects of market volatilities on Nextcom and Sofwave Medical 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 Nextcom with a short position of Sofwave Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextcom and Sofwave Medical.
Diversification Opportunities for Nextcom and Sofwave Medical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nextcom and Sofwave is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nextcom and Sofwave Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofwave Medical and Nextcom 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 Nextcom are associated (or correlated) with Sofwave Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofwave Medical has no effect on the direction of Nextcom i.e., Nextcom and Sofwave Medical go up and down completely randomly.
Pair Corralation between Nextcom and Sofwave Medical
Assuming the 90 days trading horizon Nextcom is expected to generate 0.8 times more return on investment than Sofwave Medical. However, Nextcom is 1.25 times less risky than Sofwave Medical. It trades about -0.09 of its potential returns per unit of risk. Sofwave Medical is currently generating about -0.34 per unit of risk. If you would invest 96,830 in Nextcom on December 31, 2024 and sell it today you would lose (3,000) from holding Nextcom or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextcom vs. Sofwave Medical
Performance |
| Timeline |
| Nextcom |
| Sofwave Medical |
Nextcom and Sofwave Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextcom and Sofwave Medical
The main advantage of trading using opposite Nextcom and Sofwave Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextcom position performs unexpectedly, Sofwave Medical 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 Sofwave Medical will offset losses from the drop in Sofwave Medical's long position.| Nextcom vs. EN Shoham Business | ||
| Nextcom vs. Accel Solutions Group | ||
| Nextcom vs. SR Accord | ||
| Nextcom vs. Rapac Communication Infrastructure |
| Sofwave Medical vs. Batm Advanced Communications | ||
| Sofwave Medical vs. Mobile Max M | ||
| Sofwave Medical vs. Clal Biotechnology Industries | ||
| Sofwave Medical vs. Rapac Communication Infrastructure |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |