Correlation Between Spectrumone Publ and Acarix AS

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

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

Diversification Opportunities for Spectrumone Publ and Acarix AS

0.35

Correlation Coefficient

Spectrumone Publ  Acarix AS

Weak diversification

The 3 months correlation between Spectrumone and Acarix is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Spectrumone publ AB and Acarix AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acarix AS and Spectrumone 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 Spectrumone publ AB are associated (or correlated) with Acarix AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acarix AS has no effect on the direction of Spectrumone Publ i.e., Spectrumone Publ and Acarix AS go up and down completely randomly.

Pair Corralation between Spectrumone Publ and Acarix AS

Assuming the 90 days trading horizon Spectrumone publ AB is expected to under-perform the Acarix AS. But the stock apears to be less risky and, when comparing its historical volatility, Spectrumone publ AB is 1.22 times less risky than Acarix AS. The stock trades about -0.17 of its potential returns per unit of risk. The Acarix AS is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  33.00  in Acarix AS on September 17, 2024 and sell it today you would lose (7.00) from holding Acarix AS or give up 21.21% of portfolio value over 90 days.

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

Spectrumone publ AB  vs.  Acarix AS

Spectrumone publ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spectrumone publ AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Spectrumone Publ and Acarix AS

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

The idea behind Spectrumone publ AB and Acarix AS 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.