Correlation Between Enad Global and Investor
Can any of the company-specific risk be diversified away by investing in both Enad Global and Investor 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 Enad Global and Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enad Global 7 and Investor AB ser, you can compare the effects of market volatilities on Enad Global and Investor 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 Enad Global with a short position of Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enad Global and Investor.
Diversification Opportunities for Enad Global and Investor
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enad and Investor is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Enad Global 7 and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser and Enad Global 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 Enad Global 7 are associated (or correlated) with Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Enad Global i.e., Enad Global and Investor go up and down completely randomly.
Pair Corralation between Enad Global and Investor
Assuming the 90 days trading horizon Enad Global 7 is expected to under-perform the Investor. In addition to that, Enad Global is 3.25 times more volatile than Investor AB ser. It trades about -0.03 of its total potential returns per unit of risk. Investor AB ser is currently generating about 0.1 per unit of volatility. If you would invest 19,543 in Investor AB ser on October 21, 2024 and sell it today you would earn a total of 11,747 from holding Investor AB ser or generate 60.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enad Global 7 vs. Investor AB ser
Performance |
| Timeline |
| Enad Global 7 |
| Investor AB ser |
Enad Global and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enad Global and Investor
The main advantage of trading using opposite Enad Global and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enad Global position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| Enad Global vs. Stillfront Group AB | Enad Global vs. Embracer Group AB | Enad Global vs. G5 Entertainment publ | Enad Global vs. Sinch AB |
| Investor vs. Kinnevik Investment AB | Investor vs. Investment AB Latour | Investor vs. Samhllsbyggnadsbolaget i Norden | Investor vs. Industrivarden AB ser |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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