Correlation Between AroCell AB and AXichem AB
Can any of the company-specific risk be diversified away by investing in both AroCell AB and AXichem AB 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 AroCell AB and AXichem AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AroCell AB and aXichem AB, you can compare the effects of market volatilities on AroCell AB and AXichem AB 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 AroCell AB with a short position of AXichem AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of AroCell AB and AXichem AB.
Diversification Opportunities for AroCell AB and AXichem AB
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AroCell and AXichem is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AroCell AB and aXichem AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on aXichem AB and AroCell AB 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 AroCell AB are associated (or correlated) with AXichem AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of aXichem AB has no effect on the direction of AroCell AB i.e., AroCell AB and AXichem AB go up and down completely randomly.
Pair Corralation between AroCell AB and AXichem AB
Assuming the 90 days trading horizon AroCell AB is expected to generate 0.67 times more return on investment than AXichem AB. However, AroCell AB is 1.49 times less risky than AXichem AB. It trades about 0.17 of its potential returns per unit of risk. aXichem AB is currently generating about -0.03 per unit of risk. If you would invest 56.00 in AroCell AB on November 27, 2024 and sell it today you would earn a total of 5.00 from holding AroCell AB or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AroCell AB vs. aXichem AB
Performance |
| Timeline |
| AroCell AB |
| aXichem AB |
AroCell AB and AXichem AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AroCell AB and AXichem AB
The main advantage of trading using opposite AroCell AB and AXichem AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AroCell AB position performs unexpectedly, AXichem AB 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 AXichem AB will offset losses from the drop in AXichem AB's long position.The idea behind AroCell AB and aXichem 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.| AXichem AB vs. Enzymatica publ AB | AXichem AB vs. Bactiguard Holding AB | AXichem AB vs. Cantargia AB | AXichem AB vs. BIMobject AB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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