Correlation Between Absolent Group and Enorama Pharma
Can any of the company-specific risk be diversified away by investing in both Absolent Group and Enorama Pharma 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 Absolent Group and Enorama Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolent Group AB and Enorama Pharma AB, you can compare the effects of market volatilities on Absolent Group and Enorama Pharma 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 Absolent Group with a short position of Enorama Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolent Group and Enorama Pharma.
Diversification Opportunities for Absolent Group and Enorama Pharma
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Absolent and Enorama is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Absolent Group AB and Enorama Pharma AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enorama Pharma AB and Absolent 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 Absolent Group AB are associated (or correlated) with Enorama Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enorama Pharma AB has no effect on the direction of Absolent Group i.e., Absolent Group and Enorama Pharma go up and down completely randomly.
Pair Corralation between Absolent Group and Enorama Pharma
Assuming the 90 days trading horizon Absolent Group AB is expected to generate 0.57 times more return on investment than Enorama Pharma. However, Absolent Group AB is 1.77 times less risky than Enorama Pharma. It trades about 0.07 of its potential returns per unit of risk. Enorama Pharma AB is currently generating about -0.13 per unit of risk. If you would invest 25,900 in Absolent Group AB on November 30, 2024 and sell it today you would earn a total of 2,000 from holding Absolent Group AB or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolent Group AB vs. Enorama Pharma AB
Performance |
| Timeline |
| Absolent Group AB |
| Enorama Pharma AB |
Absolent Group and Enorama Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolent Group and Enorama Pharma
The main advantage of trading using opposite Absolent Group and Enorama Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolent Group position performs unexpectedly, Enorama Pharma 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 Enorama Pharma will offset losses from the drop in Enorama Pharma's long position.| Absolent Group vs. AQ Group AB | Absolent Group vs. Troax Group AB | Absolent Group vs. Bufab Holding AB | Absolent Group vs. Beijer Ref AB |
| Enorama Pharma vs. Cantargia AB | Enorama Pharma vs. Enzymatica publ AB | Enorama Pharma vs. Lidds AB | Enorama Pharma vs. BioArctic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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