Correlation Between Nexam Chemical and Organoclick

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

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

Diversification Opportunities for Nexam Chemical and Organoclick

0.17

Correlation Coefficient

Nexam Chemical  Organoclick

Average diversification

The 3 months correlation between Nexam and Organoclick is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Organoclick AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organoclick AB and Nexam Chemical 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 Nexam Chemical Holding are associated (or correlated) with Organoclick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organoclick AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Organoclick go up and down completely randomly.

Pair Corralation between Nexam Chemical and Organoclick

Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 1.6 times more return on investment than Organoclick. However, Nexam Chemical is 1.6 times more volatile than Organoclick AB. It trades about 0.13 of its potential returns per unit of risk. Organoclick AB is currently generating about -0.06 per unit of risk. If you would invest  391.00  in Nexam Chemical Holding on October 13, 2024 and sell it today you would earn a total of  29.00  from holding Nexam Chemical Holding or generate 7.42% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Organoclick AB

Nexam Chemical Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nexam Chemical Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nexam Chemical may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Organoclick AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Organoclick AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Organoclick 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 Nexam Chemical and Organoclick

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

The idea behind Nexam Chemical Holding and Organoclick 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..