Correlation Between Innerscope Advertising and Nexgel

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

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

Diversification Opportunities for Innerscope Advertising and Nexgel

-0.73

Correlation Coefficient

Innerscope Advertising  Nexgel

Pay attention - limited upside

The 3 months correlation between Innerscope and Nexgel is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Innerscope Advertising Agency and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc and Innerscope Advertising 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 Innerscope Advertising Agency 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 Innerscope Advertising i.e., Innerscope Advertising and Nexgel go up and down completely randomly.

Pair Corralation between Innerscope Advertising and Nexgel

Given the investment horizon of 90 days Innerscope Advertising Agency is expected to under-perform the Nexgel. In addition to that, Innerscope Advertising is 2.79 times more volatile than Nexgel Inc. It trades about -0.14 of its total potential returns per unit of risk. Nexgel Inc is currently generating about 0.15 per unit of volatility. If you would invest  272.00  in Nexgel Inc on September 13, 2024 and sell it today you would earn a total of  127.00  from holding Nexgel Inc or generate 46.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Innerscope Advertising Agency  vs.  Nexgel Inc

Innerscope Advertising

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innerscope Advertising Agency has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Nexgel Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nexgel Inc are ranked lower than 11 (%) 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 Innerscope Advertising and Nexgel

The main advantage of trading using opposite Innerscope Advertising and Nexgel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innerscope Advertising 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 Innerscope Advertising Agency 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.