Correlation Between Cyber Security and Enersize
Can any of the company-specific risk be diversified away by investing in both Cyber Security 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 Cyber Security and Enersize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyber Security 1 and Enersize Oy, you can compare the effects of market volatilities on Cyber Security 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 Cyber Security with a short position of Enersize. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyber Security and Enersize.
Diversification Opportunities for Cyber Security and Enersize
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cyber and Enersize is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cyber Security 1 and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and Cyber Security 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 Cyber Security 1 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 Cyber Security i.e., Cyber Security and Enersize go up and down completely randomly.
Pair Corralation between Cyber Security and Enersize
Assuming the 90 days trading horizon Cyber Security 1 is expected to under-perform the Enersize. In addition to that, Cyber Security is 1.36 times more volatile than Enersize Oy. It trades about -0.23 of its total potential returns per unit of risk. Enersize Oy is currently generating about -0.24 per unit of volatility. If you would invest 0.68 in Enersize Oy on September 24, 2024 and sell it today you would lose (0.16) from holding Enersize Oy or give up 23.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cyber Security 1 vs. Enersize Oy
Performance |
| Timeline |
| Cyber Security 1 |
| Enersize Oy |
Cyber Security and Enersize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cyber Security and Enersize
The main advantage of trading using opposite Cyber Security and Enersize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyber Security 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.The idea behind Cyber Security 1 and Enersize Oy 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.| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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