Correlation Between Photomyne and Nextcom
Can any of the company-specific risk be diversified away by investing in both Photomyne and Nextcom 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 Photomyne and Nextcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photomyne and Nextcom, you can compare the effects of market volatilities on Photomyne and Nextcom 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 Photomyne with a short position of Nextcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photomyne and Nextcom.
Diversification Opportunities for Photomyne and Nextcom
Very good diversification
The 3 months correlation between Photomyne and Nextcom is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Photomyne and Nextcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextcom and Photomyne 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 Photomyne are associated (or correlated) with Nextcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextcom has no effect on the direction of Photomyne i.e., Photomyne and Nextcom go up and down completely randomly.
Pair Corralation between Photomyne and Nextcom
Assuming the 90 days trading horizon Photomyne is expected to generate 0.5 times more return on investment than Nextcom. However, Photomyne is 2.02 times less risky than Nextcom. It trades about 0.26 of its potential returns per unit of risk. Nextcom is currently generating about 0.12 per unit of risk. If you would invest 282,400 in Photomyne on September 15, 2024 and sell it today you would earn a total of 19,000 from holding Photomyne or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Photomyne vs. Nextcom
Performance |
| Timeline |
| Photomyne |
| Nextcom |
Photomyne and Nextcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Photomyne and Nextcom
The main advantage of trading using opposite Photomyne and Nextcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photomyne position performs unexpectedly, Nextcom 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 Nextcom will offset losses from the drop in Nextcom's long position.| Photomyne vs. Arad Investment Industrial | Photomyne vs. RSL Electronics | Photomyne vs. Meitav Dash Investments | Photomyne vs. Hiron Trade Investments Industrial |
| Nextcom vs. Tower Semiconductor | Nextcom vs. Israel Discount Bank | Nextcom vs. B Communications | Nextcom vs. Photomyne |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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