Correlation Between NextCell Pharma and Swedish Orphan

Can any of the company-specific risk be diversified away by investing in both NextCell Pharma and Swedish Orphan 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 Swedish Orphan 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 Swedish Orphan Biovitrum, you can compare the effects of market volatilities on NextCell Pharma and Swedish Orphan 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 Swedish Orphan. Check out your portfolio center. Please also check ongoing floating volatility patterns of NextCell Pharma and Swedish Orphan.

Diversification Opportunities for NextCell Pharma and Swedish Orphan

0.0

Correlation Coefficient

NextCell Pharma  Swedish Orphan

Pay attention - limited upside

The 3 months correlation between NextCell and Swedish is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NextCell Pharma AB and Swedish Orphan Biovitrum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedish Orphan Biovitrum 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 Swedish Orphan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedish Orphan Biovitrum has no effect on the direction of NextCell Pharma i.e., NextCell Pharma and Swedish Orphan go up and down completely randomly.

Pair Corralation between NextCell Pharma and Swedish Orphan

If you would invest (100.00) in NextCell Pharma AB on March 19, 2024 and sell it today you would earn a total of  100.00  from holding NextCell Pharma AB or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NextCell Pharma AB  vs.  Swedish Orphan Biovitrum

NextCell Pharma AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Swedish Orphan Biovitrum

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swedish Orphan Biovitrum are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Swedish Orphan is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NextCell Pharma and Swedish Orphan

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

The idea behind NextCell Pharma AB and Swedish Orphan Biovitrum 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.