Correlation Between Nexstim Oyj and BBS Bioactive
Can any of the company-specific risk be diversified away by investing in both Nexstim Oyj and BBS Bioactive 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 Nexstim Oyj and BBS Bioactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstim Oyj and BBS Bioactive Bone Substitutes, you can compare the effects of market volatilities on Nexstim Oyj and BBS Bioactive 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 Nexstim Oyj with a short position of BBS Bioactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstim Oyj and BBS Bioactive.
Diversification Opportunities for Nexstim Oyj and BBS Bioactive
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nexstim and BBS is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nexstim Oyj and BBS Bioactive Bone Substitutes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBS Bioactive Bone and Nexstim Oyj 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 Nexstim Oyj are associated (or correlated) with BBS Bioactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBS Bioactive Bone has no effect on the direction of Nexstim Oyj i.e., Nexstim Oyj and BBS Bioactive go up and down completely randomly.
Pair Corralation between Nexstim Oyj and BBS Bioactive
Assuming the 90 days trading horizon Nexstim Oyj is expected to generate 0.59 times more return on investment than BBS Bioactive. However, Nexstim Oyj is 1.69 times less risky than BBS Bioactive. It trades about 0.29 of its potential returns per unit of risk. BBS Bioactive Bone Substitutes is currently generating about -0.09 per unit of risk. If you would invest 788.00 in Nexstim Oyj on November 28, 2024 and sell it today you would earn a total of 130.00 from holding Nexstim Oyj or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstim Oyj vs. BBS Bioactive Bone Substitutes
Performance |
| Timeline |
| Nexstim Oyj |
| BBS Bioactive Bone |
Nexstim Oyj and BBS Bioactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstim Oyj and BBS Bioactive
The main advantage of trading using opposite Nexstim Oyj and BBS Bioactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstim Oyj position performs unexpectedly, BBS Bioactive 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 BBS Bioactive will offset losses from the drop in BBS Bioactive's long position.| Nexstim Oyj vs. Tecnotree Oyj | Nexstim Oyj vs. Qt Group Oyj | Nexstim Oyj vs. Finnair Oyj | Nexstim Oyj vs. Harvia Oyj |
| BBS Bioactive vs. Nexstim Oyj | BBS Bioactive vs. Nightingale Health Oyj | BBS Bioactive vs. Kamux Suomi Oy | BBS Bioactive vs. Spinnova Oy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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