Correlation Between Enzymatica Publ and Proact IT

Can any of the company-specific risk be diversified away by investing in both Enzymatica Publ and Proact IT 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 Proact IT 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 Proact IT Group, you can compare the effects of market volatilities on Enzymatica Publ and Proact IT 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 Proact IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enzymatica Publ and Proact IT.

Diversification Opportunities for Enzymatica Publ and Proact IT

0.34

Correlation Coefficient

Enzymatica Publ  Proact IT

Weak diversification

The 3 months correlation between Enzymatica and Proact is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enzymatica publ AB and Proact IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proact IT Group 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 Proact IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proact IT Group has no effect on the direction of Enzymatica Publ i.e., Enzymatica Publ and Proact IT go up and down completely randomly.

Pair Corralation between Enzymatica Publ and Proact IT

Assuming the 90 days trading horizon Enzymatica publ AB is expected to generate 3.16 times more return on investment than Proact IT. However, Enzymatica Publ is 3.16 times more volatile than Proact IT Group. It trades about 0.15 of its potential returns per unit of risk. Proact IT Group is currently generating about -0.06 per unit of risk. If you would invest  163.00  in Enzymatica publ AB on December 4, 2024 and sell it today you would earn a total of  127.00  from holding Enzymatica publ AB or generate 77.91% return on investment over 90 days.

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

Enzymatica publ AB  vs.  Proact IT Group

Enzymatica publ AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enzymatica publ AB are ranked lower than 12 (%) 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.

Proact IT Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Proact IT Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Enzymatica Publ and Proact IT

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

The idea behind Enzymatica publ AB and Proact IT Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .