Correlation Between Nexgel and Milestone Scientific

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

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

Diversification Opportunities for Nexgel and Milestone Scientific

-0.37

Correlation Coefficient

Nexgel  Milestone Scientific

Very good diversification

The 3 months correlation between Nexgel and Milestone is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific 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 Milestone Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Scientific has no effect on the direction of Nexgel i.e., Nexgel and Milestone Scientific go up and down completely randomly.

Pair Corralation between Nexgel and Milestone Scientific

Given the investment horizon of 90 days Nexgel Inc is expected to generate 0.87 times more return on investment than Milestone Scientific. However, Nexgel Inc is 1.15 times less risky than Milestone Scientific. It trades about 0.15 of its potential returns per unit of risk. Milestone Scientific is currently generating about -0.01 per unit of risk. If you would invest  272.00  in Nexgel Inc on September 13, 2024 and sell it today you would earn a total of  127.00  from holding Nexgel Inc or generate 46.69% return on investment over 90 days.

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

Nexgel Inc  vs.  Milestone Scientific

Nexgel Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nexgel Inc are ranked lower than 11 (%) 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.

Milestone Scientific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Milestone Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Milestone Scientific is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nexgel and Milestone Scientific

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

The idea behind Nexgel Inc and Milestone Scientific 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 Commodity Directory module to find actively traded commodities issued by global exchanges.