Correlation Between Avantium Holding and NX Filtration

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

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

Diversification Opportunities for Avantium Holding and NX Filtration

0.1

Correlation Coefficient

Avantium Holding  NX Filtration

Average diversification

The 3 months correlation between Avantium and NXFIL is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Avantium Holding BV and NX Filtration Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NX Filtration Holding and Avantium Holding 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 Avantium Holding BV are associated (or correlated) with NX Filtration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NX Filtration Holding has no effect on the direction of Avantium Holding i.e., Avantium Holding and NX Filtration go up and down completely randomly.

Pair Corralation between Avantium Holding and NX Filtration

Assuming the 90 days trading horizon Avantium Holding BV is expected to under-perform the NX Filtration. In addition to that, Avantium Holding is 1.04 times more volatile than NX Filtration Holding. It trades about -0.1 of its total potential returns per unit of risk. NX Filtration Holding is currently generating about -0.01 per unit of volatility. If you would invest  333.00  in NX Filtration Holding on December 24, 2024 and sell it today you would lose (10.00) from holding NX Filtration Holding or give up 3.0% of portfolio value over 90 days.

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

Avantium Holding BV  vs.  NX Filtration Holding

Avantium Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avantium Holding BV 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NX Filtration Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days NX Filtration Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NX Filtration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Avantium Holding and NX Filtration

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

The idea behind Avantium Holding BV and NX Filtration Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.