Correlation Between Enzymatica Publ and BioArctic

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

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

Diversification Opportunities for Enzymatica Publ and BioArctic

-0.14

Correlation Coefficient

Enzymatica Publ  BioArctic

Good diversification

The 3 months correlation between Enzymatica and BioArctic is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Enzymatica publ AB and BioArctic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioArctic AB and Enzymatica Publ 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 Enzymatica publ AB are associated (or correlated) with BioArctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioArctic AB has no effect on the direction of Enzymatica Publ i.e., Enzymatica Publ and BioArctic go up and down completely randomly.

Pair Corralation between Enzymatica Publ and BioArctic

Assuming the 90 days trading horizon Enzymatica publ AB is expected to generate 2.54 times more return on investment than BioArctic. However, Enzymatica Publ is 2.54 times more volatile than BioArctic AB. It trades about 0.24 of its potential returns per unit of risk. BioArctic AB is currently generating about -0.03 per unit of risk. If you would invest  158.00  in Enzymatica publ AB on December 26, 2024 and sell it today you would earn a total of  316.00  from holding Enzymatica publ AB or generate 200.0% return on investment over 90 days.

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

Enzymatica publ AB  vs.  BioArctic AB

Enzymatica publ AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enzymatica publ AB are ranked lower than 18 (%) 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.

BioArctic AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioArctic AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Enzymatica Publ and BioArctic

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

The idea behind Enzymatica publ AB and BioArctic 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.