Correlation Between Axcella Health and Nutriband

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

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

Diversification Opportunities for Axcella Health and Nutriband

0.59

Correlation Coefficient

Axcella Health  Nutriband

Very weak diversification

The 3 months correlation between Axcella and Nutriband is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and Nutriband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutriband and Axcella Health 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 Axcella Health are associated (or correlated) with Nutriband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutriband has no effect on the direction of Axcella Health i.e., Axcella Health and Nutriband go up and down completely randomly.

Pair Corralation between Axcella Health and Nutriband

If you would invest  437.00  in Nutriband on September 12, 2024 and sell it today you would lose (37.00) from holding Nutriband or give up 8.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Axcella Health  vs.  Nutriband

Axcella Health

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nutriband

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with Axcella Health and Nutriband

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

The idea behind Axcella Health and Nutriband 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.