Correlation Between AXichem AB and Enzymatica Publ

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

By analyzing existing cross correlation between aXichem AB and Enzymatica publ AB, you can compare the effects of market volatilities on AXichem AB and Enzymatica Publ 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 AXichem AB with a short position of Enzymatica Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXichem AB and Enzymatica Publ.

Diversification Opportunities for AXichem AB and Enzymatica Publ

0.17

Correlation Coefficient

AXichem AB  Enzymatica Publ

Average diversification

The 3 months correlation between AXichem and Enzymatica is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding aXichem AB and Enzymatica publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzymatica publ AB and AXichem AB 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 aXichem AB are associated (or correlated) with Enzymatica Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzymatica publ AB has no effect on the direction of AXichem AB i.e., AXichem AB and Enzymatica Publ go up and down completely randomly.

Pair Corralation between AXichem AB and Enzymatica Publ

Assuming the 90 days trading horizon aXichem AB is expected to under-perform the Enzymatica Publ. But the stock apears to be less risky and, when comparing its historical volatility, aXichem AB is 1.41 times less risky than Enzymatica Publ. The stock trades about -0.06 of its potential returns per unit of risk. The Enzymatica publ AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  174.00  in Enzymatica publ AB on December 2, 2024 and sell it today you would earn a total of  21.00  from holding Enzymatica publ AB or generate 12.07% return on investment over 90 days.

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

aXichem AB  vs.  Enzymatica publ AB

aXichem AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days aXichem AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Enzymatica publ AB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enzymatica publ AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enzymatica Publ unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AXichem AB and Enzymatica Publ

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

The idea behind aXichem AB and Enzymatica publ AB 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.