Correlation Between AXichem AB and Botnia Exploration
Can any of the company-specific risk be diversified away by investing in both AXichem AB and Botnia Exploration 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 AXichem AB and Botnia Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between aXichem AB and Botnia Exploration Holding, you can compare the effects of market volatilities on AXichem AB and Botnia Exploration 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 AXichem AB with a short position of Botnia Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXichem AB and Botnia Exploration.
Diversification Opportunities for AXichem AB and Botnia Exploration
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AXichem and Botnia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding aXichem AB and Botnia Exploration Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Botnia Exploration and AXichem 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 aXichem AB are associated (or correlated) with Botnia Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Botnia Exploration has no effect on the direction of AXichem AB i.e., AXichem AB and Botnia Exploration go up and down completely randomly.
Pair Corralation between AXichem AB and Botnia Exploration
Assuming the 90 days trading horizon AXichem AB is expected to generate 3.05 times less return on investment than Botnia Exploration. But when comparing it to its historical volatility, aXichem AB is 1.29 times less risky than Botnia Exploration. It trades about 0.04 of its potential returns per unit of risk. Botnia Exploration Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,215 in Botnia Exploration Holding on November 5, 2024 and sell it today you would earn a total of 75.00 from holding Botnia Exploration Holding or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
aXichem AB vs. Botnia Exploration Holding
Performance |
| Timeline |
| aXichem AB |
| Botnia Exploration |
AXichem AB and Botnia Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXichem AB and Botnia Exploration
The main advantage of trading using opposite AXichem AB and Botnia Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXichem AB position performs unexpectedly, Botnia Exploration 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 Botnia Exploration will offset losses from the drop in Botnia Exploration's long position.| AXichem AB vs. Enzymatica publ AB | AXichem AB vs. Bactiguard Holding AB | AXichem AB vs. Cantargia AB | AXichem AB vs. BIMobject AB |
| Botnia Exploration vs. aXichem AB | Botnia Exploration vs. BE Group AB | Botnia Exploration vs. Arctic Gold Publ |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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