Correlation Between Swedencare Publ and Nexam Chemical
Can any of the company-specific risk be diversified away by investing in both Swedencare Publ 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 Swedencare Publ and Nexam Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swedencare publ AB and Nexam Chemical Holding, you can compare the effects of market volatilities on Swedencare Publ 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 Swedencare Publ with a short position of Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swedencare Publ and Nexam Chemical.
Diversification Opportunities for Swedencare Publ and Nexam Chemical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swedencare and Nexam is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Swedencare publ 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 Swedencare Publ 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 Swedencare publ 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 Swedencare Publ i.e., Swedencare Publ and Nexam Chemical go up and down completely randomly.
Pair Corralation between Swedencare Publ and Nexam Chemical
Assuming the 90 days trading horizon Swedencare publ AB is expected to generate 0.44 times more return on investment than Nexam Chemical. However, Swedencare publ AB is 2.29 times less risky than Nexam Chemical. It trades about 0.11 of its potential returns per unit of risk. Nexam Chemical Holding is currently generating about -0.08 per unit of risk. If you would invest 4,600 in Swedencare publ AB on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Swedencare publ AB or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swedencare publ AB vs. Nexam Chemical Holding
Performance |
| Timeline |
| Swedencare publ AB |
| Nexam Chemical Holding |
Swedencare Publ and Nexam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swedencare Publ and Nexam Chemical
The main advantage of trading using opposite Swedencare Publ and Nexam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swedencare Publ 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.| Swedencare Publ vs. Enzymatica publ AB | Swedencare Publ vs. KABE Group AB | Swedencare Publ vs. IAR Systems Group | Swedencare Publ vs. Mekonomen AB |
| Nexam Chemical vs. Svenska Aerogel Holding | Nexam Chemical vs. Organoclick AB | Nexam Chemical vs. Kancera AB | Nexam Chemical vs. BIMobject 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |