Correlation Between Redsense Medical and Nexam Chemical
Can any of the company-specific risk be diversified away by investing in both Redsense Medical and Nexam Chemical 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 Redsense Medical and Nexam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redsense Medical AB and Nexam Chemical Holding, you can compare the effects of market volatilities on Redsense Medical and Nexam Chemical 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 Redsense Medical with a short position of Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redsense Medical and Nexam Chemical.
Diversification Opportunities for Redsense Medical and Nexam Chemical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Redsense and Nexam is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Redsense Medical AB and Nexam Chemical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexam Chemical Holding and Redsense Medical 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 Redsense Medical AB are associated (or correlated) with Nexam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexam Chemical Holding has no effect on the direction of Redsense Medical i.e., Redsense Medical and Nexam Chemical go up and down completely randomly.
Pair Corralation between Redsense Medical and Nexam Chemical
Assuming the 90 days trading horizon Redsense Medical AB is expected to generate 1.23 times more return on investment than Nexam Chemical. However, Redsense Medical is 1.23 times more volatile than Nexam Chemical Holding. It trades about 0.01 of its potential returns per unit of risk. Nexam Chemical Holding is currently generating about 0.0 per unit of risk. If you would invest 936.00 in Redsense Medical AB on September 2, 2024 and sell it today you would lose (226.00) from holding Redsense Medical AB or give up 24.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Redsense Medical AB vs. Nexam Chemical Holding
Performance |
| Timeline |
| Redsense Medical |
| Nexam Chemical Holding |
Redsense Medical and Nexam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redsense Medical and Nexam Chemical
The main advantage of trading using opposite Redsense Medical and Nexam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redsense Medical position performs unexpectedly, Nexam Chemical 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 Nexam Chemical will offset losses from the drop in Nexam Chemical's long position.| Redsense Medical vs. Soder Sportfiske AB | Redsense Medical vs. Kinnevik Investment AB | Redsense Medical vs. G5 Entertainment publ | Redsense Medical vs. Havsfrun Investment AB |
| Nexam Chemical vs. Polygiene AB | Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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