Correlation Between Arcticzymes Technologies and PCI Biotech

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

Diversification Opportunities for Arcticzymes Technologies and PCI Biotech

0.31

Correlation Coefficient

Arcticzymes Technologies  PCI Biotech

Weak diversification

The 3 months correlation between Arcticzymes and PCI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and PCI Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCI Biotech 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 PCI Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCI Biotech Holding has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and PCI Biotech go up and down completely randomly.

Pair Corralation between Arcticzymes Technologies and PCI Biotech

Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to generate 0.71 times more return on investment than PCI Biotech. However, Arcticzymes Technologies ASA is 1.4 times less risky than PCI Biotech. It trades about 0.09 of its potential returns per unit of risk. PCI Biotech Holding is currently generating about 0.07 per unit of risk. If you would invest  1,334  in Arcticzymes Technologies ASA on December 30, 2024 and sell it today you would earn a total of  298.00  from holding Arcticzymes Technologies ASA or generate 22.34% 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.  PCI Biotech Holding

Arcticzymes Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arcticzymes Technologies ASA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Arcticzymes Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.

PCI Biotech Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PCI Biotech Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, PCI Biotech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arcticzymes Technologies and PCI Biotech

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

The idea behind Arcticzymes Technologies ASA and PCI Biotech 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.