Correlation Between NexGel Warrant and AngioDynamics

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

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

Diversification Opportunities for NexGel Warrant and AngioDynamics

0.78

Correlation Coefficient

NexGel Warrant  AngioDynamics

Poor diversification

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

Pair Corralation between NexGel Warrant and AngioDynamics

Assuming the 90 days horizon NexGel Warrant is expected to generate 21.89 times more return on investment than AngioDynamics. However, NexGel Warrant is 21.89 times more volatile than AngioDynamics. It trades about 0.09 of its potential returns per unit of risk. AngioDynamics is currently generating about -0.01 per unit of risk. If you would invest  20.00  in NexGel Warrant on October 4, 2024 and sell it today you would earn a total of  55.00  from holding NexGel Warrant or generate 275.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	71.37%
Values	Daily Returns

NexGel Warrant  vs.  AngioDynamics

NexGel Warrant

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NexGel Warrant are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, NexGel Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

AngioDynamics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AngioDynamics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, AngioDynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NexGel Warrant and AngioDynamics

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

The idea behind NexGel Warrant and AngioDynamics 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.