Correlation Between Paxman AB and Enzymatica Publ

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

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

Diversification Opportunities for Paxman AB and Enzymatica Publ

-0.4

Correlation Coefficient

Paxman AB  Enzymatica Publ

Very good diversification

The 3 months correlation between Paxman and Enzymatica is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Paxman AB and Enzymatica publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzymatica publ AB and Paxman AB 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 Paxman AB are associated (or correlated) with Enzymatica Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzymatica publ AB has no effect on the direction of Paxman AB i.e., Paxman AB and Enzymatica Publ go up and down completely randomly.

Pair Corralation between Paxman AB and Enzymatica Publ

Assuming the 90 days trading horizon Paxman AB is expected to generate 0.99 times more return on investment than Enzymatica Publ. However, Paxman AB is 1.01 times less risky than Enzymatica Publ. It trades about 0.09 of its potential returns per unit of risk. Enzymatica publ AB is currently generating about -0.08 per unit of risk. If you would invest  6,280  in Paxman AB on October 20, 2024 and sell it today you would earn a total of  860.00  from holding Paxman AB or generate 13.69% return on investment over 90 days.

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

Paxman AB  vs.  Enzymatica publ AB

Paxman AB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paxman AB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Paxman AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Enzymatica publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enzymatica publ 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Paxman AB and Enzymatica Publ

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

The idea behind Paxman AB and Enzymatica publ 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.