Correlation Between Focus Home and EnBW Energie
Can any of the company-specific risk be diversified away by investing in both Focus Home and EnBW Energie 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 Focus Home and EnBW Energie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and EnBW Energie Baden Wrttemberg, you can compare the effects of market volatilities on Focus Home and EnBW Energie 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 Focus Home with a short position of EnBW Energie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and EnBW Energie.
Diversification Opportunities for Focus Home and EnBW Energie
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Focus and EnBW is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and EnBW Energie Baden Wrttemberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnBW Energie Baden and Focus Home 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 Focus Home Interactive are associated (or correlated) with EnBW Energie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnBW Energie Baden has no effect on the direction of Focus Home i.e., Focus Home and EnBW Energie go up and down completely randomly.
Pair Corralation between Focus Home and EnBW Energie
Assuming the 90 days horizon Focus Home Interactive is expected to under-perform the EnBW Energie. In addition to that, Focus Home is 2.07 times more volatile than EnBW Energie Baden Wrttemberg. It trades about -0.02 of its total potential returns per unit of risk. EnBW Energie Baden Wrttemberg is currently generating about -0.02 per unit of volatility. If you would invest 8,299 in EnBW Energie Baden Wrttemberg on September 13, 2024 and sell it today you would lose (2,019) from holding EnBW Energie Baden Wrttemberg or give up 24.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.42% |
| Values | Daily Returns |
Focus Home Interactive vs. EnBW Energie Baden Wrttemberg
Performance |
| Timeline |
| Focus Home Interactive |
| EnBW Energie Baden |
Focus Home and EnBW Energie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and EnBW Energie
The main advantage of trading using opposite Focus Home and EnBW Energie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, EnBW Energie 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 EnBW Energie will offset losses from the drop in EnBW Energie's long position.| Focus Home vs. NEXON Co | Focus Home vs. Take Two Interactive Software | Focus Home vs. Superior Plus Corp | Focus Home vs. SIVERS SEMICONDUCTORS AB |
| EnBW Energie vs. British American Tobacco | EnBW Energie vs. Focus Home Interactive | EnBW Energie vs. bet at home AG | EnBW Energie vs. American Homes 4 |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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