Correlation Between Arcticzymes Technologies and Proximar Seafood

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

Diversification Opportunities for Arcticzymes Technologies and Proximar Seafood

-0.65

Correlation Coefficient

Arcticzymes Technologies  Proximar Seafood

Excellent diversification

The 3 months correlation between Arcticzymes and Proximar is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and Proximar Seafood AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximar Seafood 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 Proximar Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximar Seafood has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and Proximar Seafood go up and down completely randomly.

Pair Corralation between Arcticzymes Technologies and Proximar Seafood

Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to generate 1.66 times more return on investment than Proximar Seafood. However, Arcticzymes Technologies is 1.66 times more volatile than Proximar Seafood AS. It trades about 0.14 of its potential returns per unit of risk. Proximar Seafood AS is currently generating about -0.01 per unit of risk. If you would invest  1,324  in Arcticzymes Technologies ASA on December 25, 2024 and sell it today you would earn a total of  474.00  from holding Arcticzymes Technologies ASA or generate 35.8% return on investment over 90 days.

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

Arcticzymes Technologies ASA  vs.  Proximar Seafood AS

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 10 (%) 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.

Proximar Seafood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proximar Seafood AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Proximar Seafood is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Arcticzymes Technologies and Proximar Seafood

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

The idea behind Arcticzymes Technologies ASA and Proximar Seafood 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.