Correlation Between Acarix AS and Gabather

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

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

Diversification Opportunities for Acarix AS and Gabather

0.07

Correlation Coefficient

Acarix AS  Gabather

Significant diversification

The 3 months correlation between Acarix and Gabather is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Acarix AS and Gabather AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabather AB and Acarix 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 Acarix AS are associated (or correlated) with Gabather. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabather AB has no effect on the direction of Acarix AS i.e., Acarix AS and Gabather go up and down completely randomly.

Pair Corralation between Acarix AS and Gabather

Assuming the 90 days trading horizon Acarix AS is expected to under-perform the Gabather. But the stock apears to be less risky and, when comparing its historical volatility, Acarix AS is 2.24 times less risky than Gabather. The stock trades about -0.02 of its potential returns per unit of risk. The Gabather AB is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Gabather AB on September 12, 2024 and sell it today you would lose (15.00) from holding Gabather AB or give up 25.0% of portfolio value over 90 days.

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

Acarix AS  vs.  Gabather AB

Acarix AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acarix AS 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.

Gabather AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabather AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Gabather is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Acarix AS and Gabather

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

The idea behind Acarix AS and Gabather 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.