Correlation Between Enad Global and Momentum Group
Can any of the company-specific risk be diversified away by investing in both Enad Global and Momentum Group 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 Momentum Group 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 Momentum Group AB, you can compare the effects of market volatilities on Enad Global and Momentum Group 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 Momentum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enad Global and Momentum Group.
Diversification Opportunities for Enad Global and Momentum Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enad and Momentum is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Enad Global 7 and Momentum Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentum Group AB 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 Momentum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentum Group AB has no effect on the direction of Enad Global i.e., Enad Global and Momentum Group go up and down completely randomly.
Pair Corralation between Enad Global and Momentum Group
Assuming the 90 days trading horizon Enad Global 7 is expected to generate 1.0 times more return on investment than Momentum Group. However, Enad Global is 1.0 times more volatile than Momentum Group AB. It trades about 0.27 of its potential returns per unit of risk. Momentum Group AB is currently generating about 0.06 per unit of risk. If you would invest 1,398 in Enad Global 7 on September 24, 2024 and sell it today you would earn a total of 224.00 from holding Enad Global 7 or generate 16.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Enad Global 7 vs. Momentum Group AB
Performance |
Timeline |
Enad Global 7 |
Momentum Group AB |
Enad Global and Momentum Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enad Global and Momentum Group
The main advantage of trading using opposite Enad Global and Momentum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enad Global position performs unexpectedly, Momentum Group 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 Momentum Group will offset losses from the drop in Momentum Group's long position.Enad Global vs. Samhllsbyggnadsbolaget i Norden | Enad Global vs. Sinch AB | Enad Global vs. Zaptec AS | Enad Global vs. Evolution AB |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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