Correlation Between Varex Imaging and Nexalin Technology
Can any of the company-specific risk be diversified away by investing in both Varex Imaging and Nexalin Technology 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 Varex Imaging and Nexalin Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varex Imaging Corp and Nexalin Technology, you can compare the effects of market volatilities on Varex Imaging and Nexalin Technology 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 Varex Imaging with a short position of Nexalin Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varex Imaging and Nexalin Technology.
Diversification Opportunities for Varex Imaging and Nexalin Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Varex and Nexalin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Nexalin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexalin Technology and Varex Imaging 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 Varex Imaging Corp are associated (or correlated) with Nexalin Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexalin Technology has no effect on the direction of Varex Imaging i.e., Varex Imaging and Nexalin Technology go up and down completely randomly.
Pair Corralation between Varex Imaging and Nexalin Technology
Given the investment horizon of 90 days Varex Imaging is expected to generate 4.11 times less return on investment than Nexalin Technology. But when comparing it to its historical volatility, Varex Imaging Corp is 7.73 times less risky than Nexalin Technology. It trades about 0.42 of its potential returns per unit of risk. Nexalin Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Nexalin Technology on September 2, 2024 and sell it today you would earn a total of 26.00 from holding Nexalin Technology or generate 72.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varex Imaging Corp vs. Nexalin Technology
Performance |
| Timeline |
| Varex Imaging Corp |
| Nexalin Technology |
Varex Imaging and Nexalin Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varex Imaging and Nexalin Technology
The main advantage of trading using opposite Varex Imaging and Nexalin Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging position performs unexpectedly, Nexalin Technology 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 Nexalin Technology will offset losses from the drop in Nexalin Technology's long position.| Varex Imaging vs. Sight Sciences | Varex Imaging vs. Apyx Medical | Varex Imaging vs. Si Bone | Varex Imaging vs. Iradimed Co |
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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 Stocks Directory module to find actively traded stocks across global markets.
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