Correlation Between Nexam Chemical and Maven Wireless

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

By analyzing existing cross correlation between Nexam Chemical Holding and Maven Wireless Sweden, you can compare the effects of market volatilities on Nexam Chemical and Maven Wireless 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 Nexam Chemical with a short position of Maven Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Maven Wireless.

Diversification Opportunities for Nexam Chemical and Maven Wireless

0.19

Correlation Coefficient

Nexam Chemical  Maven Wireless

Average diversification

The 3 months correlation between Nexam and Maven is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Maven Wireless Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maven Wireless Sweden and Nexam Chemical 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 Nexam Chemical Holding are associated (or correlated) with Maven Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maven Wireless Sweden has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Maven Wireless go up and down completely randomly.

Pair Corralation between Nexam Chemical and Maven Wireless

Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 1.06 times more return on investment than Maven Wireless. However, Nexam Chemical is 1.06 times more volatile than Maven Wireless Sweden. It trades about 0.04 of its potential returns per unit of risk. Maven Wireless Sweden is currently generating about -0.12 per unit of risk. If you would invest  343.00  in Nexam Chemical Holding on September 5, 2024 and sell it today you would earn a total of  43.00  from holding Nexam Chemical Holding or generate 12.54% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Maven Wireless Sweden

Nexam Chemical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexam Chemical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Maven Wireless Sweden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maven Wireless Sweden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nexam Chemical and Maven Wireless

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

The idea behind Nexam Chemical Holding and Maven Wireless Sweden 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.