Correlation Between Acarix AS and Senzime AB

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

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

Diversification Opportunities for Acarix AS and Senzime AB

0.34

Correlation Coefficient

Acarix AS  Senzime AB

Weak diversification

The 3 months correlation between Acarix and Senzime is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Acarix AS and Senzime AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senzime 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 Senzime AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senzime AB has no effect on the direction of Acarix AS i.e., Acarix AS and Senzime AB go up and down completely randomly.

Pair Corralation between Acarix AS and Senzime AB

Assuming the 90 days trading horizon Acarix AS is expected to under-perform the Senzime AB. But the stock apears to be less risky and, when comparing its historical volatility, Acarix AS is 1.18 times less risky than Senzime AB. The stock trades about -0.05 of its potential returns per unit of risk. The Senzime AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  565.00  in Senzime AB on October 25, 2024 and sell it today you would earn a total of  25.00  from holding Senzime AB or generate 4.42% return on investment over 90 days.

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

Acarix AS  vs.  Senzime 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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Senzime AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senzime AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Senzime AB is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Acarix AS and Senzime AB

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

The idea behind Acarix AS and Senzime 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.