Correlation Between Nexam Chemical and Gaming Corps

Can any of the company-specific risk be diversified away by investing in both Nexam Chemical and Gaming Corps 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 Gaming Corps 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 Gaming Corps AB, you can compare the effects of market volatilities on Nexam Chemical and Gaming Corps 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 Gaming Corps. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexam Chemical and Gaming Corps.

Diversification Opportunities for Nexam Chemical and Gaming Corps

0.58

Correlation Coefficient

Nexam Chemical  Gaming Corps

Very weak diversification

The 3 months correlation between Nexam and Gaming is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Gaming Corps AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Corps AB 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 Gaming Corps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Corps AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Gaming Corps go up and down completely randomly.

Pair Corralation between Nexam Chemical and Gaming Corps

Assuming the 90 days trading horizon Nexam Chemical is expected to generate 26.15 times less return on investment than Gaming Corps. But when comparing it to its historical volatility, Nexam Chemical Holding is 1.65 times less risky than Gaming Corps. It trades about 0.03 of its potential returns per unit of risk. Gaming Corps AB is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Gaming Corps AB on April 16, 2025 and sell it today you would earn a total of  41.00  from holding Gaming Corps AB or generate 41.41% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Gaming Corps 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 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nexam Chemical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gaming Corps AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Corps AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Gaming Corps unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexam Chemical and Gaming Corps

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

The idea behind Nexam Chemical Holding and Gaming Corps 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.