Correlation Between Spineguard and Neovacs SA

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

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

Diversification Opportunities for Spineguard and Neovacs SA

0.67

Correlation Coefficient

Spineguard  Neovacs SA

Poor diversification

The 3 months correlation between Spineguard and Neovacs is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Spineguard and Neovacs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neovacs SA and Spineguard 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 Spineguard are associated (or correlated) with Neovacs SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neovacs SA has no effect on the direction of Spineguard i.e., Spineguard and Neovacs SA go up and down completely randomly.

Pair Corralation between Spineguard and Neovacs SA

Assuming the 90 days trading horizon Spineguard is expected to generate 0.33 times more return on investment than Neovacs SA. However, Spineguard is 3.0 times less risky than Neovacs SA. It trades about -0.04 of its potential returns per unit of risk. Neovacs SA is currently generating about -0.47 per unit of risk. If you would invest  22.00  in Spineguard on December 2, 2024 and sell it today you would lose (2.00) from holding Spineguard or give up 9.09% of portfolio value over 90 days.

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

Spineguard  vs.  Neovacs SA

Spineguard

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spineguard has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Neovacs SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neovacs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Spineguard and Neovacs SA

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

The idea behind Spineguard and Neovacs 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.