Correlation Between Ascelia Pharma and NextCell Pharma

Can any of the company-specific risk be diversified away by investing in both Ascelia Pharma and NextCell 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 Ascelia Pharma and NextCell Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ascelia Pharma AB and NextCell Pharma AB, you can compare the effects of market volatilities on Ascelia Pharma and NextCell 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 Ascelia Pharma with a short position of NextCell Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascelia Pharma and NextCell Pharma.

Diversification Opportunities for Ascelia Pharma and NextCell Pharma

-0.14

Correlation Coefficient

Ascelia Pharma  NextCell Pharma

Good diversification

The 3 months correlation between Ascelia and NextCell is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ascelia Pharma AB and NextCell Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCell Pharma AB and Ascelia Pharma 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 Ascelia Pharma AB are associated (or correlated) with NextCell Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCell Pharma AB has no effect on the direction of Ascelia Pharma i.e., Ascelia Pharma and NextCell Pharma go up and down completely randomly.

Pair Corralation between Ascelia Pharma and NextCell Pharma

Assuming the 90 days trading horizon Ascelia Pharma is expected to generate 1.05 times less return on investment than NextCell Pharma. In addition to that, Ascelia Pharma is 1.35 times more volatile than NextCell Pharma AB. It trades about 0.1 of its total potential returns per unit of risk. NextCell Pharma AB is currently generating about 0.14 per unit of volatility. If you would invest  128.00  in NextCell Pharma AB on September 2, 2024 and sell it today you would earn a total of  47.00  from holding NextCell Pharma AB or generate 36.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ascelia Pharma AB  vs.  NextCell Pharma AB

Ascelia Pharma AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascelia Pharma AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Ascelia Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

NextCell Pharma AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NextCell Pharma AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NextCell Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ascelia Pharma and NextCell Pharma

The main advantage of trading using opposite Ascelia Pharma and NextCell Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascelia Pharma position performs unexpectedly, NextCell 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 NextCell Pharma will offset losses from the drop in NextCell Pharma's long position.

The idea behind Ascelia Pharma AB and NextCell Pharma AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.