Correlation Between Zaptec AS and Everfuel

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

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

Diversification Opportunities for Zaptec AS and Everfuel

0.08

Correlation Coefficient

Zaptec AS  Everfuel

Significant diversification

The 3 months correlation between Zaptec and Everfuel is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Zaptec AS and Everfuel AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everfuel AS and Zaptec 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 Zaptec AS are associated (or correlated) with Everfuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everfuel AS has no effect on the direction of Zaptec AS i.e., Zaptec AS and Everfuel go up and down completely randomly.

Pair Corralation between Zaptec AS and Everfuel

Assuming the 90 days trading horizon Zaptec AS is expected to under-perform the Everfuel. In addition to that, Zaptec AS is 3.95 times more volatile than Everfuel AS. It trades about -0.07 of its total potential returns per unit of risk. Everfuel AS is currently generating about 0.01 per unit of volatility. If you would invest  1,286  in Everfuel AS on September 15, 2024 and sell it today you would earn a total of  6.00  from holding Everfuel AS or generate 0.47% return on investment over 90 days.

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

Zaptec AS  vs.  Everfuel AS

Zaptec AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zaptec AS 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.

Everfuel AS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zaptec AS and Everfuel

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

The idea behind Zaptec AS and Everfuel 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.