Correlation Between Avinger and Nexgel

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

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

Diversification Opportunities for Avinger and Nexgel

-0.58

Correlation Coefficient

Avinger  Nexgel

Excellent diversification

The 3 months correlation between Avinger and Nexgel is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Avinger and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc and Avinger 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 Avinger 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 Avinger i.e., Avinger and Nexgel go up and down completely randomly.

Pair Corralation between Avinger and Nexgel

Given the investment horizon of 90 days Avinger is expected to under-perform the Nexgel. In addition to that, Avinger is 1.48 times more volatile than Nexgel Inc. It trades about 0.0 of its total potential returns per unit of risk. Nexgel Inc is currently generating about 0.07 per unit of volatility. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Avinger  vs.  Nexgel Inc

Avinger

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avinger has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Avinger is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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 Avinger and Nexgel

The main advantage of trading using opposite Avinger and Nexgel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avinger 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 Avinger 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 Stocks Directory module to find actively traded stocks across global markets.