Correlation Between Arcticzymes Technologies and Bonheur

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

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

Diversification Opportunities for Arcticzymes Technologies and Bonheur

0.63

Correlation Coefficient

Arcticzymes Technologies  Bonheur

Poor diversification

The 3 months correlation between Arcticzymes and Bonheur is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Arcticzymes Technologies ASA and Bonheur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonheur and Arcticzymes Technologies 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 Arcticzymes Technologies ASA are associated (or correlated) with Bonheur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonheur has no effect on the direction of Arcticzymes Technologies i.e., Arcticzymes Technologies and Bonheur go up and down completely randomly.

Pair Corralation between Arcticzymes Technologies and Bonheur

Assuming the 90 days trading horizon Arcticzymes Technologies ASA is expected to under-perform the Bonheur. In addition to that, Arcticzymes Technologies is 2.5 times more volatile than Bonheur. It trades about -0.09 of its total potential returns per unit of risk. Bonheur is currently generating about -0.03 per unit of volatility. If you would invest  27,500  in Bonheur on September 13, 2024 and sell it today you would lose (850.00) from holding Bonheur or give up 3.09% of portfolio value over 90 days.

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

Arcticzymes Technologies ASA  vs.  Bonheur

Arcticzymes Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcticzymes Technologies ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bonheur

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonheur has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bonheur is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Arcticzymes Technologies and Bonheur

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

The idea behind Arcticzymes Technologies ASA and Bonheur 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..