Correlation Between NextCell Pharma and Acuvi AB

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

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

Diversification Opportunities for NextCell Pharma and Acuvi AB

-0.76

Correlation Coefficient

NextCell Pharma  Acuvi AB

Pay attention - limited upside

The 3 months correlation between NextCell and Acuvi is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding NextCell Pharma AB and Acuvi AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuvi AB and NextCell Pharma 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 NextCell Pharma AB are associated (or correlated) with Acuvi AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuvi AB has no effect on the direction of NextCell Pharma i.e., NextCell Pharma and Acuvi AB go up and down completely randomly.

Pair Corralation between NextCell Pharma and Acuvi AB

Assuming the 90 days trading horizon NextCell Pharma AB is expected to generate 12.42 times more return on investment than Acuvi AB. However, NextCell Pharma is 12.42 times more volatile than Acuvi AB. It trades about 0.16 of its potential returns per unit of risk. Acuvi AB is currently generating about 0.27 per unit of risk. If you would invest  129.00  in NextCell Pharma AB on March 2, 2024 and sell it today you would earn a total of  68.00  from holding NextCell Pharma AB or generate 52.71% return on investment over 90 days.

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

NextCell Pharma AB  vs.  Acuvi AB

NextCell Pharma AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NextCell Pharma AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, NextCell Pharma unveiled solid returns over the last few months and may actually be approaching a breakup point.

Acuvi AB

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Acuvi AB are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Acuvi AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NextCell Pharma and Acuvi AB

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

The idea behind NextCell Pharma AB and Acuvi AB 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..