Correlation Between Nexgel and Precision Optics,

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

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

Diversification Opportunities for Nexgel and Precision Optics,

-0.26

Correlation Coefficient

Nexgel  Precision Optics,

Very good diversification

The 3 months correlation between Nexgel and Precision is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and Precision Optics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Optics, and Nexgel 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 Nexgel Inc are associated (or correlated) with Precision Optics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Optics, has no effect on the direction of Nexgel i.e., Nexgel and Precision Optics, go up and down completely randomly.

Pair Corralation between Nexgel and Precision Optics,

Given the investment horizon of 90 days Nexgel Inc is expected to generate 0.95 times more return on investment than Precision Optics,. However, Nexgel Inc is 1.05 times less risky than Precision Optics,. It trades about 0.07 of its potential returns per unit of risk. Precision Optics, is currently generating about -0.03 per unit of risk. If you would invest  281.00  in Nexgel Inc on September 2, 2024 and sell it today you would earn a total of  37.00  from holding Nexgel Inc or generate 13.17% return on investment over 90 days.

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

Nexgel Inc  vs.  Precision Optics,

Nexgel Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nexgel Inc are ranked lower than 5 (%) 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.

Precision Optics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precision Optics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Nexgel and Precision Optics,

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

The idea behind Nexgel Inc and Precision Optics, 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.