Correlation Between Immunovia Publ and Nexam Chemical

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

By analyzing existing cross correlation between Immunovia publ AB and Nexam Chemical Holding, you can compare the effects of market volatilities on Immunovia Publ and Nexam Chemical 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 Immunovia Publ with a short position of Nexam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immunovia Publ and Nexam Chemical.

Diversification Opportunities for Immunovia Publ and Nexam Chemical

0.48

Correlation Coefficient

Immunovia Publ  Nexam Chemical

Very weak diversification

The 3 months correlation between Immunovia and Nexam is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Immunovia publ AB and Nexam Chemical Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexam Chemical Holding and Immunovia Publ 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 Immunovia publ AB are associated (or correlated) with Nexam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexam Chemical Holding has no effect on the direction of Immunovia Publ i.e., Immunovia Publ and Nexam Chemical go up and down completely randomly.

Pair Corralation between Immunovia Publ and Nexam Chemical

Assuming the 90 days trading horizon Immunovia publ AB is expected to generate 3.03 times more return on investment than Nexam Chemical. However, Immunovia Publ is 3.03 times more volatile than Nexam Chemical Holding. It trades about 0.05 of its potential returns per unit of risk. Nexam Chemical Holding is currently generating about -0.1 per unit of risk. If you would invest  79.00  in Immunovia publ AB on September 7, 2024 and sell it today you would earn a total of  1.00  from holding Immunovia publ AB or generate 1.27% return on investment over 90 days.

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

Immunovia publ AB  vs.  Nexam Chemical Holding

Immunovia publ AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immunovia publ AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Immunovia Publ sustained solid returns over the last few months and may actually be approaching a breakup point.

Nexam Chemical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexam Chemical Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Immunovia Publ and Nexam Chemical

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

The idea behind Immunovia publ AB and Nexam Chemical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.