Correlation Between Enzymatica Publ and Scandi Standard

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

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

Diversification Opportunities for Enzymatica Publ and Scandi Standard

0.62

Correlation Coefficient

Enzymatica Publ  Scandi Standard

Poor diversification

The 3 months correlation between Enzymatica and Scandi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Enzymatica publ AB and Scandi Standard publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandi Standard publ and Enzymatica Publ 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 Enzymatica publ AB are associated (or correlated) with Scandi Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandi Standard publ has no effect on the direction of Enzymatica Publ i.e., Enzymatica Publ and Scandi Standard go up and down completely randomly.

Pair Corralation between Enzymatica Publ and Scandi Standard

Assuming the 90 days trading horizon Enzymatica publ AB is expected to under-perform the Scandi Standard. In addition to that, Enzymatica Publ is 2.96 times more volatile than Scandi Standard publ. It trades about -0.19 of its total potential returns per unit of risk. Scandi Standard publ is currently generating about -0.02 per unit of volatility. If you would invest  8,675  in Scandi Standard publ on September 14, 2024 and sell it today you would lose (155.00) from holding Scandi Standard publ or give up 1.79% of portfolio value over 90 days.

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

Enzymatica publ AB  vs.  Scandi Standard publ

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Scandi Standard publ

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Enzymatica Publ and Scandi Standard

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

The idea behind Enzymatica publ AB and Scandi Standard publ 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.