Correlation Between Serstech and Enzymatica Publ

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

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

Diversification Opportunities for Serstech and Enzymatica Publ

0.18

Correlation Coefficient

Serstech  Enzymatica Publ

Average diversification

The 3 months correlation between Serstech and Enzymatica is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Serstech 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 Serstech 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 Serstech 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 Serstech i.e., Serstech and Enzymatica Publ go up and down completely randomly.

Pair Corralation between Serstech and Enzymatica Publ

Assuming the 90 days trading horizon Serstech AB is expected to generate 1.74 times more return on investment than Enzymatica Publ. However, Serstech is 1.74 times more volatile than Enzymatica publ AB. It trades about 0.01 of its potential returns per unit of risk. Enzymatica publ AB is currently generating about -0.21 per unit of risk. If you would invest  120.00  in Serstech AB on September 13, 2024 and sell it today you would lose (5.00) from holding Serstech AB or give up 4.17% of portfolio value over 90 days.

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

Serstech AB  vs.  Enzymatica publ AB

Serstech AB

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Serstech and Enzymatica Publ

The main advantage of trading using opposite Serstech and Enzymatica Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serstech 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 Serstech 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.