Correlation Between Norva24 Group and AXichem AB
Can any of the company-specific risk be diversified away by investing in both Norva24 Group 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 Norva24 Group and AXichem AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norva24 Group AB and aXichem AB, you can compare the effects of market volatilities on Norva24 Group 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 Norva24 Group with a short position of AXichem AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norva24 Group and AXichem AB.
Diversification Opportunities for Norva24 Group and AXichem AB
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Norva24 and AXichem is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Norva24 Group AB and aXichem AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on aXichem AB and Norva24 Group 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 Norva24 Group 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 Norva24 Group i.e., Norva24 Group and AXichem AB go up and down completely randomly.
Pair Corralation between Norva24 Group and AXichem AB
Assuming the 90 days trading horizon Norva24 Group AB is expected to under-perform the AXichem AB. But the stock apears to be less risky and, when comparing its historical volatility, Norva24 Group AB is 3.14 times less risky than AXichem AB. The stock trades about -0.3 of its potential returns per unit of risk. The aXichem AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 136.00 in aXichem AB on August 28, 2024 and sell it today you would lose (4.00) from holding aXichem AB or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norva24 Group AB vs. aXichem AB
Performance |
| Timeline |
| Norva24 Group AB |
| aXichem AB |
Norva24 Group and AXichem AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norva24 Group and AXichem AB
The main advantage of trading using opposite Norva24 Group and AXichem AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norva24 Group 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.| Norva24 Group vs. Fasadgruppen Group AB | Norva24 Group vs. Green Landscaping Group | Norva24 Group vs. Volati AB | Norva24 Group vs. Instalco Intressenter AB |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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