Correlation Between Axactor SE and Holand Og

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

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

Diversification Opportunities for Axactor SE and Holand Og

-0.7

Correlation Coefficient

Axactor SE  Holand Og

Excellent diversification

The 3 months correlation between Axactor and Holand is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Holand og Setskog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holand og Setskog 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 Holand Og. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holand og Setskog has no effect on the direction of Axactor SE i.e., Axactor SE and Holand Og go up and down completely randomly.

Pair Corralation between Axactor SE and Holand Og

Assuming the 90 days trading horizon Axactor SE is expected to under-perform the Holand Og. But the stock apears to be less risky and, when comparing its historical volatility, Axactor SE is 1.33 times less risky than Holand Og. The stock trades about -0.03 of its potential returns per unit of risk. The Holand og Setskog is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  12,000  in Holand og Setskog on October 7, 2024 and sell it today you would earn a total of  2,500  from holding Holand og Setskog or generate 20.83% return on investment over 90 days.

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

Axactor SE  vs.  Holand og Setskog

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 quite persistent basic indicators, Axactor SE is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Holand og Setskog

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Holand og Setskog are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Holand Og disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axactor SE and Holand Og

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

The idea behind Axactor SE and Holand og Setskog 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.