Correlation Between Axactor SE and Goodtech

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

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

Diversification Opportunities for Axactor SE and Goodtech

0.94

Correlation Coefficient

Axactor SE  Goodtech

Almost no diversification

The 3 months correlation between Axactor and Goodtech is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech 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 Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Axactor SE i.e., Axactor SE and Goodtech go up and down completely randomly.

Pair Corralation between Axactor SE and Goodtech

Assuming the 90 days trading horizon Axactor SE is expected to under-perform the Goodtech. But the stock apears to be less risky and, when comparing its historical volatility, Axactor SE is 1.19 times less risky than Goodtech. The stock trades about -0.05 of its potential returns per unit of risk. The Goodtech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  801.00  in Goodtech on September 5, 2024 and sell it today you would earn a total of  133.00  from holding Goodtech or generate 16.6% return on investment over 90 days.

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

Axactor SE  vs.  Goodtech

Axactor SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axactor SE 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 quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Goodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Axactor SE and Goodtech

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

The idea behind Axactor SE and Goodtech 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.