Correlation Between Ennoconn Corp and Aker Technology
Can any of the company-specific risk be diversified away by investing in both Ennoconn Corp and Aker Technology 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 Ennoconn Corp and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ennoconn Corp and Aker Technology Co, you can compare the effects of market volatilities on Ennoconn Corp and Aker Technology 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 Ennoconn Corp with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ennoconn Corp and Aker Technology.
Diversification Opportunities for Ennoconn Corp and Aker Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ennoconn and Aker is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ennoconn Corp and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and Ennoconn Corp 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 Ennoconn Corp are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of Ennoconn Corp i.e., Ennoconn Corp and Aker Technology go up and down completely randomly.
Pair Corralation between Ennoconn Corp and Aker Technology
Assuming the 90 days trading horizon Ennoconn Corp is expected to generate 0.69 times more return on investment than Aker Technology. However, Ennoconn Corp is 1.45 times less risky than Aker Technology. It trades about -0.11 of its potential returns per unit of risk. Aker Technology Co is currently generating about -0.22 per unit of risk. If you would invest 29,400 in Ennoconn Corp on November 7, 2024 and sell it today you would lose (650.00) from holding Ennoconn Corp or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Ennoconn Corp vs. Aker Technology Co
Performance |
| Timeline |
| Ennoconn Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aker Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Ennoconn Corp and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ennoconn Corp and Aker Technology
The main advantage of trading using opposite Ennoconn Corp and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ennoconn Corp position performs unexpectedly, Aker Technology 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 Aker Technology will offset losses from the drop in Aker Technology's long position.The idea behind Ennoconn Corp and Aker Technology Co 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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