Correlation Between Nexam Chemical and Swedencare Publ

Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Swedencare Publ 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 Swedencare Publ 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 Swedencare publ AB, you can compare the effects of market volatilities on Nexam Chemical and Swedencare Publ 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 Swedencare Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Swedencare Publ.

Diversification Opportunities for Nexam Chemical and Swedencare Publ

-0.03

Correlation Coefficient

Nexam Chemical  Swedencare Publ

Good diversification

The 3 months correlation between Nexam and Swedencare is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Swedencare publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedencare publ 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 Swedencare Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedencare publ AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Swedencare Publ go up and down completely randomly.

Pair Corralation between Nexam Chemical and Swedencare Publ

Assuming the 90 days trading horizon Nexam Chemical Holding is expected to under-perform the Swedencare Publ. In addition to that, Nexam Chemical is 1.67 times more volatile than Swedencare publ AB. It trades about -0.09 of its total potential returns per unit of risk. Swedencare publ AB is currently generating about 0.14 per unit of volatility. If you would invest  4,188  in Swedencare publ AB on September 3, 2024 and sell it today you would earn a total of  772.00  from holding Swedencare publ AB or generate 18.43% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Swedencare publ AB

Nexam Chemical Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexam Chemical Holding 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.

Swedencare publ AB

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedencare publ AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Swedencare Publ sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexam Chemical and Swedencare Publ

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

The idea behind Nexam Chemical Holding and Swedencare publ 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.