Correlation Between Arcticzymes Technologies and Crayon Group

Can any of the company-specific risk be diversified away by investing in both Arcticzymes Technologies and Crayon Group 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 Arcticzymes Technologies and Crayon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arcticzymes Technologies ASA and Crayon Group Holding, you can compare the effects of market volatilities on Arcticzymes Technologies and Crayon Group 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 Arcticzymes Technologies with a short position of Crayon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcticzymes Technologies and Crayon Group.

Diversification Opportunities for Arcticzymes Technologies and Crayon Group

0.26

Correlation Coefficient

Arcticzymes Technologies  Crayon Group

Modest diversification

The 3 months correlation between Arcticzymes and Crayon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and Crayon Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crayon Group Holding and Arcticzymes Technologies 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 Arcticzymes Technologies ASA are associated (or correlated) with Crayon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crayon Group Holding has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and Crayon Group go up and down completely randomly.

Pair Corralation between Arcticzymes Technologies and Crayon Group

Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to under-perform the Crayon Group. In addition to that, Arcticzymes Technologies is 1.96 times more volatile than Crayon Group Holding. It trades about -0.29 of its total potential returns per unit of risk. Crayon Group Holding is currently generating about 0.39 per unit of volatility. If you would invest  10,510  in Crayon Group Holding on September 2, 2024 and sell it today you would earn a total of  2,140  from holding Crayon Group Holding or generate 20.36% return on investment over 90 days.

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

Arcticzymes Technologies ASA  vs.  Crayon Group Holding

Arcticzymes Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcticzymes Technologies ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Crayon Group Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crayon Group Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Crayon Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Arcticzymes Technologies and Crayon Group

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

The idea behind Arcticzymes Technologies ASA and Crayon Group Holding 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.