Correlation Between Enad Global and Nitro Games
Can any of the company-specific risk be diversified away by investing in both Enad Global and Nitro Games 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 Nitro Games 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 Nitro Games Oyj, you can compare the effects of market volatilities on Enad Global and Nitro Games 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 Nitro Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enad Global and Nitro Games.
Diversification Opportunities for Enad Global and Nitro Games
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enad and Nitro is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Enad Global 7 and Nitro Games Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nitro Games Oyj 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 Nitro Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nitro Games Oyj has no effect on the direction of Enad Global i.e., Enad Global and Nitro Games go up and down completely randomly.
Pair Corralation between Enad Global and Nitro Games
Assuming the 90 days trading horizon Enad Global 7 is expected to generate 0.75 times more return on investment than Nitro Games. However, Enad Global 7 is 1.33 times less risky than Nitro Games. It trades about -0.03 of its potential returns per unit of risk. Nitro Games Oyj is currently generating about -0.05 per unit of risk. If you would invest 1,789 in Enad Global 7 on October 22, 2024 and sell it today you would lose (300.00) from holding Enad Global 7 or give up 16.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enad Global 7 vs. Nitro Games Oyj
Performance |
| Timeline |
| Enad Global 7 |
| Nitro Games Oyj |
Enad Global and Nitro Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enad Global and Nitro Games
The main advantage of trading using opposite Enad Global and Nitro Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enad Global position performs unexpectedly, Nitro Games 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 Nitro Games will offset losses from the drop in Nitro Games' 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 |
| Nitro Games vs. Stillfront Group AB | Nitro Games vs. G5 Entertainment publ | Nitro Games vs. Enad Global 7 | Nitro Games vs. Starbreeze 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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