Correlation Between Axactor SE and Scana ASA

Can any of the company-specific risk be diversified away by investing in both Axactor SE and Scana 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 Scana 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 Scana ASA, you can compare the effects of market volatilities on Axactor SE and Scana 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 Scana ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axactor SE and Scana ASA.

Diversification Opportunities for Axactor SE and Scana ASA

-0.72

Correlation Coefficient

Axactor SE  Scana ASA

Pay attention - limited upside

The 3 months correlation between Axactor and Scana is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Scana ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scana 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 Scana ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scana ASA has no effect on the direction of Axactor SE i.e., Axactor SE and Scana ASA go up and down completely randomly.

Pair Corralation between Axactor SE and Scana ASA

Assuming the 90 days trading horizon Axactor SE is expected to generate 1.01 times more return on investment than Scana ASA. However, Axactor SE is 1.01 times more volatile than Scana ASA. It trades about 0.14 of its potential returns per unit of risk. Scana ASA is currently generating about -0.22 per unit of risk. If you would invest  371.00  in Axactor SE on December 31, 2024 and sell it today you would earn a total of  75.00  from holding Axactor SE or generate 20.22% 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.  Scana 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 11 (%) 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.

Scana ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scana ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Axactor SE and Scana ASA

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

The idea behind Axactor SE and Scana 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.