Correlation Between Implantica and NAXS Nordic

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

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

Diversification Opportunities for Implantica and NAXS Nordic

0.79

Correlation Coefficient

Implantica  NAXS Nordic

Poor diversification

The 3 months correlation between Implantica and NAXS is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Implantica AG and NAXS Nordic Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAXS Nordic Access and Implantica 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 Implantica AG are associated (or correlated) with NAXS Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAXS Nordic Access has no effect on the direction of Implantica i.e., Implantica and NAXS Nordic go up and down completely randomly.

Pair Corralation between Implantica and NAXS Nordic

Assuming the 90 days trading horizon Implantica AG is expected to generate 2.35 times more return on investment than NAXS Nordic. However, Implantica is 2.35 times more volatile than NAXS Nordic Access. It trades about 0.01 of its potential returns per unit of risk. NAXS Nordic Access is currently generating about 0.0 per unit of risk. If you would invest  4,000  in Implantica AG on September 24, 2024 and sell it today you would lose (355.00) from holding Implantica AG or give up 8.87% of portfolio value over 90 days.

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

Implantica AG  vs.  NAXS Nordic Access

Implantica AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Implantica AG 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.

NAXS Nordic Access

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAXS Nordic Access has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Implantica and NAXS Nordic

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

The idea behind Implantica AG and NAXS Nordic Access 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.