Correlation Between Zaptec AS and Flexion Mobile

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

By analyzing existing cross correlation between Zaptec AS and Flexion Mobile PLC, you can compare the effects of market volatilities on Zaptec AS and Flexion Mobile 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 Zaptec AS with a short position of Flexion Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zaptec AS and Flexion Mobile.

Diversification Opportunities for Zaptec AS and Flexion Mobile

-0.57

Correlation Coefficient

Zaptec AS  Flexion Mobile

Excellent diversification

The 3 months correlation between Zaptec and Flexion is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Zaptec AS and Flexion Mobile PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexion Mobile PLC and Zaptec AS 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 Zaptec AS are associated (or correlated) with Flexion Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexion Mobile PLC has no effect on the direction of Zaptec AS i.e., Zaptec AS and Flexion Mobile go up and down completely randomly.

Pair Corralation between Zaptec AS and Flexion Mobile

Assuming the 90 days trading horizon Zaptec AS is expected to generate 2.93 times more return on investment than Flexion Mobile. However, Zaptec AS is 2.93 times more volatile than Flexion Mobile PLC. It trades about 0.18 of its potential returns per unit of risk. Flexion Mobile PLC is currently generating about -0.06 per unit of risk. If you would invest  1,093  in Zaptec AS on December 28, 2024 and sell it today you would earn a total of  737.00  from holding Zaptec AS or generate 67.43% return on investment over 90 days.

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

Zaptec AS  vs.  Flexion Mobile PLC

Zaptec AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zaptec AS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Zaptec AS disclosed solid returns over the last few months and may actually be approaching a breakup point.

Flexion Mobile PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flexion Mobile PLC 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 Zaptec AS and Flexion Mobile

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

The idea behind Zaptec AS and Flexion Mobile PLC 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.