Correlation Between Nexstim Oyj and Herantis Pharma
Can any of the company-specific risk be diversified away by investing in both Nexstim Oyj and Herantis Pharma 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 Herantis Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstim Oyj and Herantis Pharma Oyj, you can compare the effects of market volatilities on Nexstim Oyj and Herantis Pharma 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 Herantis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstim Oyj and Herantis Pharma.
Diversification Opportunities for Nexstim Oyj and Herantis Pharma
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nexstim and Herantis is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nexstim Oyj and Herantis Pharma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herantis Pharma Oyj 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 Herantis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herantis Pharma Oyj has no effect on the direction of Nexstim Oyj i.e., Nexstim Oyj and Herantis Pharma go up and down completely randomly.
Pair Corralation between Nexstim Oyj and Herantis Pharma
Assuming the 90 days trading horizon Nexstim Oyj is expected to under-perform the Herantis Pharma. In addition to that, Nexstim Oyj is 1.74 times more volatile than Herantis Pharma Oyj. It trades about -0.05 of its total potential returns per unit of risk. Herantis Pharma Oyj is currently generating about -0.07 per unit of volatility. If you would invest 164.00 in Herantis Pharma Oyj on November 4, 2024 and sell it today you would lose (6.00) from holding Herantis Pharma Oyj or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstim Oyj vs. Herantis Pharma Oyj
Performance |
| Timeline |
| Nexstim Oyj |
| Herantis Pharma Oyj |
Nexstim Oyj and Herantis Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstim Oyj and Herantis Pharma
The main advantage of trading using opposite Nexstim Oyj and Herantis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstim Oyj position performs unexpectedly, Herantis Pharma 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 Herantis Pharma will offset losses from the drop in Herantis Pharma's long position.| Nexstim Oyj vs. Tecnotree Oyj | Nexstim Oyj vs. Qt Group Oyj | Nexstim Oyj vs. Finnair Oyj | Nexstim Oyj vs. Harvia Oyj |
| Herantis Pharma vs. Nanoform Finland Plc | Herantis Pharma vs. Nexstim Oyj | Herantis Pharma vs. Tokmanni Group Oyj | Herantis Pharma vs. Kamux Suomi 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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