Correlation Between G Medical and Nexgel

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

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

Diversification Opportunities for G Medical and Nexgel

-0.48

Correlation Coefficient

G Medical  Nexgel

Very good diversification

The 3 months correlation between GMVD and Nexgel is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding G Medical Innovations and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc and G 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 G Medical Innovations are associated (or correlated) with Nexgel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexgel Inc has no effect on the direction of G Medical i.e., G Medical and Nexgel go up and down completely randomly.

Pair Corralation between G Medical and Nexgel

If you would invest  281.00  in Nexgel Inc on August 31, 2024 and sell it today you would earn a total of  51.00  from holding Nexgel Inc or generate 18.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

G Medical Innovations  vs.  Nexgel Inc

G Medical Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Medical Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, G Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Nexgel Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nexgel Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Nexgel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Medical and Nexgel

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

The idea behind G Medical Innovations and Nexgel Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..