Correlation Between Acarix AS and Precio Fishbone

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

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

Diversification Opportunities for Acarix AS and Precio Fishbone

0.33

Correlation Coefficient

Acarix AS  Precio Fishbone

Weak diversification

The 3 months correlation between Acarix and Precio is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Acarix AS and Precio Fishbone AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precio Fishbone 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 Precio Fishbone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precio Fishbone AB has no effect on the direction of Acarix AS i.e., Acarix AS and Precio Fishbone go up and down completely randomly.

Pair Corralation between Acarix AS and Precio Fishbone

Assuming the 90 days trading horizon Acarix AS is expected to under-perform the Precio Fishbone. In addition to that, Acarix AS is 2.28 times more volatile than Precio Fishbone AB. It trades about -0.12 of its total potential returns per unit of risk. Precio Fishbone AB is currently generating about -0.14 per unit of volatility. If you would invest  2,320  in Precio Fishbone AB on September 22, 2024 and sell it today you would lose (140.00) from holding Precio Fishbone AB or give up 6.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Acarix AS  vs.  Precio Fishbone AB

Acarix AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acarix AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Acarix AS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Precio Fishbone AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precio Fishbone AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Acarix AS and Precio Fishbone

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

The idea behind Acarix AS and Precio Fishbone 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.