Correlation Between Integragen and Netgem SA

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

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

Diversification Opportunities for Integragen and Netgem SA

-0.65

Correlation Coefficient

Integragen  Netgem SA

Excellent diversification

The 3 months correlation between Integragen and Netgem is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Integragen and Netgem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netgem SA and Integragen 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 Integragen are associated (or correlated) with Netgem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netgem SA has no effect on the direction of Integragen i.e., Integragen and Netgem SA go up and down completely randomly.

Pair Corralation between Integragen and Netgem SA

Assuming the 90 days trading horizon Integragen is expected to under-perform the Netgem SA. In addition to that, Integragen is 1.78 times more volatile than Netgem SA. It trades about -0.05 of its total potential returns per unit of risk. Netgem SA is currently generating about -0.03 per unit of volatility. If you would invest  105.00  in Netgem SA on September 4, 2024 and sell it today you would lose (2.00) from holding Netgem SA or give up 1.9% of portfolio value over 90 days.

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

Integragen  vs.  Netgem SA

Integragen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integragen has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Integragen is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Netgem SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Netgem SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Netgem SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Integragen and Netgem SA

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

The idea behind Integragen and Netgem SA 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.