Correlation Between Nexam Chemical and Clavister Holding

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

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

Diversification Opportunities for Nexam Chemical and Clavister Holding

0.25

Correlation Coefficient

Nexam Chemical  Clavister Holding

Modest diversification

The 3 months correlation between Nexam and Clavister is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Clavister Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clavister Holding and Nexam Chemical 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 Nexam Chemical Holding are associated (or correlated) with Clavister Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clavister Holding has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Clavister Holding go up and down completely randomly.

Pair Corralation between Nexam Chemical and Clavister Holding

Assuming the 90 days trading horizon Nexam Chemical is expected to generate 1.45 times less return on investment than Clavister Holding. But when comparing it to its historical volatility, Nexam Chemical Holding is 1.41 times less risky than Clavister Holding. It trades about 0.08 of its potential returns per unit of risk. Clavister Holding AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  368.00  in Clavister Holding AB on April 24, 2025 and sell it today you would earn a total of  68.00  from holding Clavister Holding AB or generate 18.48% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Clavister Holding AB

Nexam Chemical Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nexam Chemical Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Nexam Chemical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clavister Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clavister Holding AB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clavister Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexam Chemical and Clavister Holding

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

The idea behind Nexam Chemical Holding and Clavister Holding 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.