Correlation Between AXichem AB and Kakel Max

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

By analyzing existing cross correlation between aXichem AB and Kakel Max AB, you can compare the effects of market volatilities on AXichem AB and Kakel Max 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 Kakel Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXichem AB and Kakel Max.

Diversification Opportunities for AXichem AB and Kakel Max

0.09

Correlation Coefficient

AXichem AB  Kakel Max

Significant diversification

The 3 months correlation between AXichem and Kakel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding aXichem AB and Kakel Max AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakel Max 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 Kakel Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakel Max AB has no effect on the direction of AXichem AB i.e., AXichem AB and Kakel Max go up and down completely randomly.

Pair Corralation between AXichem AB and Kakel Max

Assuming the 90 days trading horizon aXichem AB is expected to generate 1.96 times more return on investment than Kakel Max. However, AXichem AB is 1.96 times more volatile than Kakel Max AB. It trades about -0.01 of its potential returns per unit of risk. Kakel Max AB is currently generating about -0.16 per unit of risk. If you would invest  136.00  in aXichem AB on December 29, 2024 and sell it today you would lose (7.00) from holding aXichem AB or give up 5.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.89%
Values	Daily Returns

aXichem AB  vs.  Kakel Max 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 somewhat strong forward indicators, AXichem AB is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Kakel Max AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kakel Max AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AXichem AB and Kakel Max

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

The idea behind aXichem AB and Kakel Max 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.