Correlation Between Nexam Chemical and Serstech

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

Diversification Opportunities for Nexam Chemical and Serstech

-0.8

Correlation Coefficient

Nexam Chemical  Serstech

Pay attention - limited upside

The 3 months correlation between Nexam and Serstech is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nexam Chemical Holding and Serstech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serstech 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 Serstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serstech AB has no effect on the direction of Nexam Chemical i.e., Nexam Chemical and Serstech go up and down completely randomly.

Pair Corralation between Nexam Chemical and Serstech

Assuming the 90 days trading horizon Nexam Chemical Holding is expected to generate 0.98 times more return on investment than Serstech. However, Nexam Chemical Holding is 1.02 times less risky than Serstech. It trades about 0.08 of its potential returns per unit of risk. Serstech AB is currently generating about -0.15 per unit of risk. If you would invest  320.00  in Nexam Chemical Holding on April 23, 2025 and sell it today you would earn a total of  44.00  from holding Nexam Chemical Holding or generate 13.75% return on investment over 90 days.

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

Nexam Chemical Holding  vs.  Serstech AB

Nexam Chemical Holding

Risk-Adjusted Performance

Modest

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 uncertain basic indicators, Nexam Chemical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Serstech AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Serstech AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nexam Chemical and Serstech

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

The idea behind Nexam Chemical Holding and Serstech 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.