Correlation Between Axactor SE and Eqva ASA

Can any of the company-specific risk be diversified away by investing in both Axactor SE and Eqva ASA 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 Axactor SE and Eqva ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Axactor SE and Eqva ASA

0.54

Correlation Coefficient

Axactor SE  Eqva ASA

Very weak diversification

The 3 months correlation between Axactor and Eqva is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Eqva ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eqva ASA and Axactor SE 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 Axactor SE are associated (or correlated) with Eqva ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eqva ASA has no effect on the direction of Axactor SE i.e., Axactor SE and Eqva ASA go up and down completely randomly.

Pair Corralation between Axactor SE and Eqva ASA

Assuming the 90 days trading horizon Axactor SE is expected to generate 0.97 times more return on investment than Eqva ASA. However, Axactor SE is 1.03 times less risky than Eqva ASA. It trades about 0.2 of its potential returns per unit of risk. Eqva ASA is currently generating about 0.07 per unit of risk. If you would invest  345.00  in Axactor SE on November 29, 2024 and sell it today you would earn a total of  115.00  from holding Axactor SE or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Axactor SE  vs.  Eqva ASA

Axactor SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axactor SE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Axactor SE disclosed solid returns over the last few months and may actually be approaching a breakup point.

Eqva ASA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eqva ASA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Eqva ASA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Axactor SE and Eqva ASA

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

The idea behind Axactor SE and Eqva ASA 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.