Correlation Between ATRION and Nexgel

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

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

Diversification Opportunities for ATRION and Nexgel

0.5

Correlation Coefficient

ATRION  Nexgel

Very weak diversification

The 3 months correlation between ATRION and Nexgel is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ATRION and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc and ATRION 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 ATRION 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 ATRION i.e., ATRION and Nexgel go up and down completely randomly.

Pair Corralation between ATRION and Nexgel

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 Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

ATRION  vs.  Nexgel Inc

ATRION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATRION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ATRION is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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.

Pair Trading with ATRION and Nexgel

The main advantage of trading using opposite ATRION and Nexgel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRION 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 ATRION 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.