Correlation Between AXichem AB and Nordic Iron
Can any of the company-specific risk be diversified away by investing in both AXichem AB and Nordic Iron 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 Nordic Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between aXichem AB and Nordic Iron Ore, you can compare the effects of market volatilities on AXichem AB and Nordic Iron 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 Nordic Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXichem AB and Nordic Iron.
Diversification Opportunities for AXichem AB and Nordic Iron
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AXichem and Nordic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding aXichem AB and Nordic Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Iron Ore 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 Nordic Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Iron Ore has no effect on the direction of AXichem AB i.e., AXichem AB and Nordic Iron go up and down completely randomly.
Pair Corralation between AXichem AB and Nordic Iron
Assuming the 90 days trading horizon aXichem AB is expected to generate 2.09 times more return on investment than Nordic Iron. However, AXichem AB is 2.09 times more volatile than Nordic Iron Ore. It trades about -0.04 of its potential returns per unit of risk. Nordic Iron Ore is currently generating about -0.11 per unit of risk. If you would invest 137.00 in aXichem AB on September 13, 2024 and sell it today you would lose (11.00) from holding aXichem AB or give up 8.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
aXichem AB vs. Nordic Iron Ore
Performance |
| Timeline |
| aXichem AB |
| Nordic Iron Ore |
AXichem AB and Nordic Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXichem AB and Nordic Iron
The main advantage of trading using opposite AXichem AB and Nordic Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXichem AB position performs unexpectedly, Nordic Iron 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 Nordic Iron will offset losses from the drop in Nordic Iron'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 |
| Nordic Iron vs. Leading Edge Materials | Nordic Iron vs. Alzinova AB | Nordic Iron vs. SaltX Technology Holding |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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