Correlation Between BE Group and Eniro AB
Can any of the company-specific risk be diversified away by investing in both BE Group and Eniro AB 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 BE Group and Eniro AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Group AB and Eniro AB, you can compare the effects of market volatilities on BE Group and Eniro AB 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 BE Group with a short position of Eniro AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Group and Eniro AB.
Diversification Opportunities for BE Group and Eniro AB
Very good diversification
The 3 months correlation between BEGR and Eniro is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BE Group AB and Eniro AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eniro AB and BE 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 BE Group AB are associated (or correlated) with Eniro AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eniro AB has no effect on the direction of BE Group i.e., BE Group and Eniro AB go up and down completely randomly.
Pair Corralation between BE Group and Eniro AB
Assuming the 90 days trading horizon BE Group AB is expected to under-perform the Eniro AB. But the stock apears to be less risky and, when comparing its historical volatility, BE Group AB is 2.48 times less risky than Eniro AB. The stock trades about -0.31 of its potential returns per unit of risk. The Eniro AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Eniro AB on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Eniro AB or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Group AB vs. Eniro AB
Performance |
| Timeline |
| BE Group AB |
| Eniro AB |
BE Group and Eniro AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Group and Eniro AB
The main advantage of trading using opposite BE Group and Eniro AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Group position performs unexpectedly, Eniro AB 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 Eniro AB will offset losses from the drop in Eniro AB's long position.| BE Group vs. Bjorn Borg AB | BE Group vs. BioInvent International AB | BE Group vs. Lindab International AB | BE Group vs. Clas Ohlson AB |
| Eniro AB vs. Alfa Laval AB | Eniro AB vs. JM AB | Eniro AB vs. Anoto Group AB | Eniro AB vs. BioInvent International 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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