Correlation Between Acarix AS and Aino Health

Can any of the company-specific risk be diversified away by investing in both Acarix AS and Aino Health 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 Acarix AS and Aino Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acarix AS and Aino Health AB, you can compare the effects of market volatilities on Acarix AS and Aino Health 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 Acarix AS with a short position of Aino Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acarix AS and Aino Health.

Diversification Opportunities for Acarix AS and Aino Health

-0.3

Correlation Coefficient

Acarix AS  Aino Health

Very good diversification

The 3 months correlation between Acarix and Aino is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Acarix AS and Aino Health AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aino Health AB and Acarix AS 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 Acarix AS are associated (or correlated) with Aino Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aino Health AB has no effect on the direction of Acarix AS i.e., Acarix AS and Aino Health go up and down completely randomly.

Pair Corralation between Acarix AS and Aino Health

Assuming the 90 days trading horizon Acarix AS is expected to generate 0.39 times more return on investment than Aino Health. However, Acarix AS is 2.59 times less risky than Aino Health. It trades about 0.02 of its potential returns per unit of risk. Aino Health AB is currently generating about -0.02 per unit of risk. If you would invest  25.00  in Acarix AS on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Acarix AS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Acarix AS  vs.  Aino Health AB

Acarix AS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Acarix AS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Acarix AS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aino Health AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aino Health AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Acarix AS and Aino Health

The main advantage of trading using opposite Acarix AS and Aino Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acarix AS position performs unexpectedly, Aino Health 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 Aino Health will offset losses from the drop in Aino Health's long position.

The idea behind Acarix AS and Aino Health 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.