Correlation Between Axactor SE and Eqva ASA

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Can any of the company-specific risk be diversified away by investing in both Axactor SE and Eqva ASA 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 Axactor SE and Eqva ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axactor SE and Eqva ASA, you can compare the effects of market volatilities on Axactor SE and Eqva ASA 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 Axactor SE with a short position of Eqva ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axactor SE and Eqva ASA.

Diversification Opportunities for Axactor SE and Eqva ASA

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Axactor and Eqva is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Eqva ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eqva ASA and Axactor SE 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 Axactor SE are associated (or correlated) with Eqva ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eqva ASA has no effect on the direction of Axactor SE i.e., Axactor SE and Eqva ASA go up and down completely randomly.

Pair Corralation between Axactor SE and Eqva ASA

Assuming the 90 days trading horizon Axactor SE is expected to under-perform the Eqva ASA. But the stock apears to be less risky and, when comparing its historical volatility, Axactor SE is 1.06 times less risky than Eqva ASA. The stock trades about -0.13 of its potential returns per unit of risk. The Eqva ASA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Eqva ASA on November 9, 2024 and sell it today you would earn a total of  201.00  from holding Eqva ASA or generate 75.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy22.97%
ValuesDaily Returns

Axactor SE  vs.  Eqva ASA

 Performance 
       Timeline  
Axactor SE 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Axactor SE are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Axactor SE disclosed solid returns over the last few months and may actually be approaching a breakup point.
Eqva ASA 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Eqva ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Eqva ASA is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Axactor SE and Eqva ASA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Axactor SE and Eqva ASA

The main advantage of trading using opposite Axactor SE and Eqva ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axactor SE position performs unexpectedly, Eqva ASA 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 Eqva ASA will offset losses from the drop in Eqva ASA's long position.
The idea behind Axactor SE and Eqva ASA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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