Correlation Between NAXS Nordic and Effnetplattformen

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

By analyzing existing cross correlation between NAXS Nordic Access and Effnetplattformen Holding AB, you can compare the effects of market volatilities on NAXS Nordic and Effnetplattformen 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 NAXS Nordic with a short position of Effnetplattformen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAXS Nordic and Effnetplattformen.

Diversification Opportunities for NAXS Nordic and Effnetplattformen

-0.87

Correlation Coefficient

NAXS Nordic  Effnetplattformen

Pay attention - limited upside

The 3 months correlation between NAXS and Effnetplattformen is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding NAXS Nordic Access and Effnetplattformen Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Effnetplattformen and NAXS Nordic 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 NAXS Nordic Access are associated (or correlated) with Effnetplattformen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Effnetplattformen has no effect on the direction of NAXS Nordic i.e., NAXS Nordic and Effnetplattformen go up and down completely randomly.

Pair Corralation between NAXS Nordic and Effnetplattformen

Assuming the 90 days trading horizon NAXS Nordic Access is expected to generate 0.68 times more return on investment than Effnetplattformen. However, NAXS Nordic Access is 1.47 times less risky than Effnetplattformen. It trades about 0.1 of its potential returns per unit of risk. Effnetplattformen Holding AB is currently generating about -0.28 per unit of risk. If you would invest  5,140  in NAXS Nordic Access on December 27, 2024 and sell it today you would earn a total of  440.00  from holding NAXS Nordic Access or generate 8.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

NAXS Nordic Access  vs.  Effnetplattformen Holding AB

NAXS Nordic Access

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NAXS Nordic Access are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NAXS Nordic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Effnetplattformen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Effnetplattformen Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with NAXS Nordic and Effnetplattformen

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

The idea behind NAXS Nordic Access and Effnetplattformen Holding 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.

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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.