Correlation Between Nexgel and Scisparc

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

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

Diversification Opportunities for Nexgel and Scisparc

0.05

Correlation Coefficient

Nexgel  Scisparc

Significant diversification

The 3 months correlation between Nexgel and Scisparc is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nexgel Inc and Scisparc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scisparc and Nexgel 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 Nexgel Inc are associated (or correlated) with Scisparc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scisparc has no effect on the direction of Nexgel i.e., Nexgel and Scisparc go up and down completely randomly.

Pair Corralation between Nexgel and Scisparc

Given the investment horizon of 90 days Nexgel Inc is expected to under-perform the Scisparc. But the stock apears to be less risky and, when comparing its historical volatility, Nexgel Inc is 1.85 times less risky than Scisparc. The stock trades about -0.02 of its potential returns per unit of risk. The Scisparc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  575.00  in Scisparc on April 30, 2025 and sell it today you would earn a total of  94.00  from holding Scisparc or generate 16.35% return on investment over 90 days.

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

Nexgel Inc  vs.  Scisparc

Nexgel Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexgel Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Nexgel is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Scisparc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Scisparc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Scisparc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nexgel and Scisparc

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

The idea behind Nexgel Inc and Scisparc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.