Correlation Between Enersize and AXichem AB
Can any of the company-specific risk be diversified away by investing in both Enersize 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 Enersize and AXichem AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersize Oy and aXichem AB, you can compare the effects of market volatilities on Enersize 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 Enersize with a short position of AXichem AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersize and AXichem AB.
Diversification Opportunities for Enersize and AXichem AB
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enersize and AXichem is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Enersize Oy and aXichem AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on aXichem AB and Enersize 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 Enersize Oy 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 Enersize i.e., Enersize and AXichem AB go up and down completely randomly.
Pair Corralation between Enersize and AXichem AB
Assuming the 90 days trading horizon Enersize Oy is expected to under-perform the AXichem AB. In addition to that, Enersize is 1.11 times more volatile than aXichem AB. It trades about -0.11 of its total potential returns per unit of risk. aXichem AB is currently generating about 0.03 per unit of volatility. If you would invest 147.00 in aXichem AB on September 1, 2024 and sell it today you would lose (2.00) from holding aXichem AB or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersize Oy vs. aXichem AB
Performance |
| Timeline |
| Enersize Oy |
| aXichem AB |
Enersize and AXichem AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersize and AXichem AB
The main advantage of trading using opposite Enersize and AXichem AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersize 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 Enersize Oy 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. Serstech AB | AXichem AB vs. Triboron International AB | AXichem AB vs. Absolent Group AB | AXichem AB vs. Alligo AB Series |
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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