Correlation Between Nexity and Antin IP

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

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

Diversification Opportunities for Nexity and Antin IP

-0.46

Correlation Coefficient

Nexity  Antin IP

Very good diversification

The 3 months correlation between Nexity and Antin is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nexity and Antin IP SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antin IP SA and Nexity 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 Nexity are associated (or correlated) with Antin IP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antin IP SA has no effect on the direction of Nexity i.e., Nexity and Antin IP go up and down completely randomly.

Pair Corralation between Nexity and Antin IP

Assuming the 90 days trading horizon Nexity is expected to generate 1.13 times more return on investment than Antin IP. However, Nexity is 1.13 times more volatile than Antin IP SA. It trades about 0.07 of its potential returns per unit of risk. Antin IP SA is currently generating about -0.04 per unit of risk. If you would invest  1,160  in Nexity on September 17, 2024 and sell it today you would earn a total of  113.00  from holding Nexity or generate 9.74% return on investment over 90 days.

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

Nexity  vs.  Antin IP SA

Nexity

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nexity are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Nexity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Antin IP SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antin IP SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Antin IP is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nexity and Antin IP

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

The idea behind Nexity and Antin IP 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.