Correlation Between Axactor SE and Integrated Wind

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

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

Diversification Opportunities for Axactor SE and Integrated Wind

-0.7

Correlation Coefficient

Axactor SE  Integrated Wind

Excellent diversification

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

Pair Corralation between Axactor SE and Integrated Wind

Assuming the 90 days trading horizon Axactor SE is expected to generate 0.99 times more return on investment than Integrated Wind. However, Axactor SE is 1.01 times less risky than Integrated Wind. It trades about 0.2 of its potential returns per unit of risk. Integrated Wind Solutions is currently generating about -0.1 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Axactor SE  vs.  Integrated Wind Solutions

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.

Integrated Wind Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Wind Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in March 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 Integrated Wind

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

The idea behind Axactor SE and Integrated Wind Solutions 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.