Correlation Between Axactor SE and Zaptec AS

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

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

Diversification Opportunities for Axactor SE and Zaptec AS

0.87

Correlation Coefficient

Axactor SE  Zaptec AS

Very poor diversification

The 3 months correlation between Axactor and Zaptec is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE and Zaptec AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaptec AS 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 Zaptec AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaptec AS has no effect on the direction of Axactor SE i.e., Axactor SE and Zaptec AS go up and down completely randomly.

Pair Corralation between Axactor SE and Zaptec AS

Assuming the 90 days trading horizon Axactor SE is expected to generate 2.66 times less return on investment than Zaptec AS. But when comparing it to its historical volatility, Axactor SE is 2.45 times less risky than Zaptec AS. It trades about 0.15 of its potential returns per unit of risk. Zaptec AS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,093  in Zaptec AS on December 30, 2024 and sell it today you would earn a total of  638.00  from holding Zaptec AS or generate 58.37% return on investment over 90 days.

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

Axactor SE  vs.  Zaptec AS

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.

Zaptec AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zaptec AS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Zaptec AS disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axactor SE and Zaptec AS

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

The idea behind Axactor SE and Zaptec AS 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.