Correlation Between AXichem AB and Embellence Group
Can any of the company-specific risk be diversified away by investing in both AXichem AB and Embellence Group 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 Embellence Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between aXichem AB and Embellence Group AB, you can compare the effects of market volatilities on AXichem AB and Embellence Group 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 Embellence Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXichem AB and Embellence Group.
Diversification Opportunities for AXichem AB and Embellence Group
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AXichem and Embellence is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding aXichem AB and Embellence Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embellence Group 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 Embellence Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embellence Group has no effect on the direction of AXichem AB i.e., AXichem AB and Embellence Group go up and down completely randomly.
Pair Corralation between AXichem AB and Embellence Group
Assuming the 90 days trading horizon aXichem AB is expected to generate 5.32 times more return on investment than Embellence Group. However, AXichem AB is 5.32 times more volatile than Embellence Group AB. It trades about 0.01 of its potential returns per unit of risk. Embellence Group AB is currently generating about -0.1 per unit of risk. If you would invest 153.00 in aXichem AB on September 5, 2024 and sell it today you would lose (6.00) from holding aXichem AB or give up 3.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
aXichem AB vs. Embellence Group AB
Performance |
| Timeline |
| aXichem AB |
| Embellence Group |
AXichem AB and Embellence Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXichem AB and Embellence Group
The main advantage of trading using opposite AXichem AB and Embellence Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXichem AB position performs unexpectedly, Embellence Group 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 Embellence Group will offset losses from the drop in Embellence Group's long position.| AXichem AB vs. Bactiguard Holding AB | AXichem AB vs. Cantargia AB | AXichem AB vs. BIMobject AB | AXichem AB vs. Alzinova AB |
| Embellence Group vs. AB Electrolux | Embellence Group vs. Husqvarna AB | Embellence Group vs. Essity AB | Embellence Group vs. Dometic Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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