Correlation Between 4C Group and Enersize
Can any of the company-specific risk be diversified away by investing in both 4C Group and Enersize 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 4C Group and Enersize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4C Group AB and Enersize Oy, you can compare the effects of market volatilities on 4C Group and Enersize 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 4C Group with a short position of Enersize. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4C Group and Enersize.
Diversification Opportunities for 4C Group and Enersize
Very poor diversification
The 3 months correlation between 4C Group and Enersize is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 4C Group AB and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and 4C Group 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 4C Group AB are associated (or correlated) with Enersize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersize Oy has no effect on the direction of 4C Group i.e., 4C Group and Enersize go up and down completely randomly.
Pair Corralation between 4C Group and Enersize
Assuming the 90 days horizon 4C Group AB is expected to generate 0.61 times more return on investment than Enersize. However, 4C Group AB is 1.64 times less risky than Enersize. It trades about -0.39 of its potential returns per unit of risk. Enersize Oy is currently generating about -0.24 per unit of risk. If you would invest 1,280 in 4C Group AB on September 25, 2024 and sell it today you would lose (280.00) from holding 4C Group AB or give up 21.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
4C Group AB vs. Enersize Oy
Performance |
| Timeline |
| 4C Group AB |
| Enersize Oy |
4C Group and Enersize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4C Group and Enersize
The main advantage of trading using opposite 4C Group and Enersize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4C Group position performs unexpectedly, Enersize 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 Enersize will offset losses from the drop in Enersize's long position.| 4C Group vs. Enersize Oy | 4C Group vs. Divio Technologies AB | 4C Group vs. Mekonomen AB | 4C Group vs. Embellence Group AB |
| Enersize vs. Lifco AB | Enersize vs. Lagercrantz Group AB | Enersize vs. Instalco Intressenter AB | Enersize vs. AddLife AB |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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