Correlation Between NX Filtration and Inpost SA

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

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

Diversification Opportunities for NX Filtration and Inpost SA

0.78

Correlation Coefficient

NX Filtration  Inpost SA

Poor diversification

The 3 months correlation between NXFIL and Inpost is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NX Filtration Holding and Inpost SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpost SA and NX Filtration 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 NX Filtration Holding are associated (or correlated) with Inpost SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpost SA has no effect on the direction of NX Filtration i.e., NX Filtration and Inpost SA go up and down completely randomly.

Pair Corralation between NX Filtration and Inpost SA

Assuming the 90 days trading horizon NX Filtration Holding is expected to under-perform the Inpost SA. In addition to that, NX Filtration is 1.98 times more volatile than Inpost SA. It trades about -0.1 of its total potential returns per unit of risk. Inpost SA is currently generating about -0.02 per unit of volatility. If you would invest  1,716  in Inpost SA on October 7, 2024 and sell it today you would lose (54.00) from holding Inpost SA or give up 3.15% of portfolio value over 90 days.

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

NX Filtration Holding  vs.  Inpost SA

NX Filtration Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NX Filtration Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic 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.

Inpost SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inpost SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Inpost SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NX Filtration and Inpost SA

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

The idea behind NX Filtration Holding and Inpost SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.