Correlation Between Axactor SE and XXL ASA
Can any of the company-specific risk be diversified away by investing in both Axactor SE and XXL 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 XXL 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 XXL ASA, you can compare the effects of market volatilities on Axactor SE and XXL 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 XXL ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axactor SE and XXL ASA.
Diversification Opportunities for Axactor SE and XXL ASA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axactor and XXL is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and XXL ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXL 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 XXL ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXL ASA has no effect on the direction of Axactor SE i.e., Axactor SE and XXL ASA go up and down completely randomly.
Pair Corralation between Axactor SE and XXL ASA
Assuming the 90 days trading horizon Axactor SE is expected to under-perform the XXL ASA. But the stock apears to be less risky and, when comparing its historical volatility, Axactor SE is 1.91 times less risky than XXL ASA. The stock trades about -0.13 of its potential returns per unit of risk. The XXL ASA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 10,462 in XXL ASA on November 9, 2024 and sell it today you would lose (9,302) from holding XXL ASA or give up 88.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.97% |
| Values | Daily Returns |
Axactor SE vs. XXL ASA
Performance |
| Timeline |
| Axactor SE |
| XXL ASA |
Axactor SE and XXL ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axactor SE and XXL ASA
The main advantage of trading using opposite Axactor SE and XXL ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axactor SE position performs unexpectedly, XXL 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 XXL ASA will offset losses from the drop in XXL ASA's long position.| Axactor SE vs. Storebrand ASA | Axactor SE vs. Aker BP ASA | Axactor SE vs. MPC Container Ships | Axactor SE vs. Norske Skog Asa |
Check out your portfolio center.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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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