Correlation Between Milestone Scientific and Nexgel

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

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

Diversification Opportunities for Milestone Scientific and Nexgel

-0.13

Correlation Coefficient

Milestone Scientific  Nexgel

Good diversification

The 3 months correlation between Milestone and Nexgel is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Milestone Scientific and Nexgel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexgel Inc and Milestone Scientific 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 Milestone Scientific 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 Milestone Scientific i.e., Milestone Scientific and Nexgel go up and down completely randomly.

Pair Corralation between Milestone Scientific and Nexgel

Given the investment horizon of 90 days Milestone Scientific is expected to generate 1.2 times more return on investment than Nexgel. However, Milestone Scientific is 1.2 times more volatile than Nexgel Inc. It trades about 0.05 of its potential returns per unit of risk. Nexgel Inc is currently generating about -0.12 per unit of risk. If you would invest  93.00  in Milestone Scientific on December 29, 2024 and sell it today you would earn a total of  6.00  from holding Milestone Scientific or generate 6.45% return on investment over 90 days.

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

Milestone Scientific  vs.  Nexgel Inc

Milestone Scientific

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Milestone Scientific are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Milestone Scientific unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nexgel Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexgel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Milestone Scientific and Nexgel

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

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.