Correlation Between Nexgel and Femasys

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

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

Diversification Opportunities for Nexgel and Femasys

-0.19

Correlation Coefficient

Nexgel  Femasys

Good diversification

The 3 months correlation between Nexgel and Femasys is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys and Nexgel 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 Nexgel Inc are associated (or correlated) with Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of Nexgel i.e., Nexgel and Femasys go up and down completely randomly.

Pair Corralation between Nexgel and Femasys

Given the investment horizon of 90 days Nexgel Inc is expected to generate 1.15 times more return on investment than Femasys. However, Nexgel is 1.15 times more volatile than Femasys. It trades about 0.08 of its potential returns per unit of risk. Femasys is currently generating about 0.01 per unit of risk. If you would invest  286.00  in Nexgel Inc on September 4, 2024 and sell it today you would earn a total of  55.00  from holding Nexgel Inc or generate 19.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Nexgel Inc  vs.  Femasys

Nexgel Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nexgel Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Nexgel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Femasys

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nexgel and Femasys

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

The idea behind Nexgel Inc and Femasys 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.