Correlation Between Sonoco Products and NEXE Innovations

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sonoco Products and NEXE Innovations 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 Sonoco Products and NEXE Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonoco Products and NEXE Innovations, you can compare the effects of market volatilities on Sonoco Products and NEXE Innovations 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 Sonoco Products with a short position of NEXE Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonoco Products and NEXE Innovations.

Diversification Opportunities for Sonoco Products and NEXE Innovations

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sonoco and NEXE is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sonoco Products and NEXE Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXE Innovations and Sonoco Products 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 Sonoco Products are associated (or correlated) with NEXE Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXE Innovations has no effect on the direction of Sonoco Products i.e., Sonoco Products and NEXE Innovations go up and down completely randomly.

Pair Corralation between Sonoco Products and NEXE Innovations

Considering the 90-day investment horizon Sonoco Products is expected to under-perform the NEXE Innovations. But the stock apears to be less risky and, when comparing its historical volatility, Sonoco Products is 3.38 times less risky than NEXE Innovations. The stock trades about -0.26 of its potential returns per unit of risk. The NEXE Innovations is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  28.00  in NEXE Innovations on October 4, 2024 and sell it today you would lose (1.00) from holding NEXE Innovations or give up 3.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sonoco Products  vs.  NEXE Innovations

 Performance 
       Timeline  
Sonoco Products 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sonoco Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
NEXE Innovations 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in NEXE Innovations are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NEXE Innovations reported solid returns over the last few months and may actually be approaching a breakup point.

Sonoco Products and NEXE Innovations Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sonoco Products and NEXE Innovations

The main advantage of trading using opposite Sonoco Products and NEXE Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonoco Products position performs unexpectedly, NEXE Innovations 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 NEXE Innovations will offset losses from the drop in NEXE Innovations' long position.
The idea behind Sonoco Products and NEXE Innovations 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities