Correlation Between Integrum and Nepa AB

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

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

Diversification Opportunities for Integrum and Nepa AB

0.39

Correlation Coefficient

Integrum  Nepa AB

Weak diversification

The 3 months correlation between Integrum and Nepa is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Integrum AB Series and Nepa AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nepa AB and Integrum 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 Integrum AB Series are associated (or correlated) with Nepa AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nepa AB has no effect on the direction of Integrum i.e., Integrum and Nepa AB go up and down completely randomly.

Pair Corralation between Integrum and Nepa AB

Assuming the 90 days trading horizon Integrum AB Series is expected to generate 1.38 times more return on investment than Nepa AB. However, Integrum is 1.38 times more volatile than Nepa AB. It trades about 0.13 of its potential returns per unit of risk. Nepa AB is currently generating about 0.11 per unit of risk. If you would invest  1,890  in Integrum AB Series on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Integrum AB Series or generate 5.29% return on investment over 90 days.

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

Integrum AB Series  vs.  Nepa AB

Integrum AB Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrum AB Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nepa AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nepa AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nepa AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Integrum and Nepa AB

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

The idea behind Integrum AB Series and Nepa AB 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..