Correlation Between Enad Global and Starbreeze
Can any of the company-specific risk be diversified away by investing in both Enad Global and Starbreeze 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 Starbreeze 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 Starbreeze AB, you can compare the effects of market volatilities on Enad Global and Starbreeze 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 Starbreeze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enad Global and Starbreeze.
Diversification Opportunities for Enad Global and Starbreeze
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enad and Starbreeze is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Enad Global 7 and Starbreeze AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbreeze 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 Starbreeze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbreeze AB has no effect on the direction of Enad Global i.e., Enad Global and Starbreeze go up and down completely randomly.
Pair Corralation between Enad Global and Starbreeze
Assuming the 90 days trading horizon Enad Global 7 is expected to generate 0.44 times more return on investment than Starbreeze. However, Enad Global 7 is 2.27 times less risky than Starbreeze. It trades about -0.09 of its potential returns per unit of risk. Starbreeze AB is currently generating about -0.25 per unit of risk. If you would invest 1,365 in Enad Global 7 on August 27, 2024 and sell it today you would lose (65.00) from holding Enad Global 7 or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enad Global 7 vs. Starbreeze AB
Performance |
| Timeline |
| Enad Global 7 |
| Starbreeze AB |
Enad Global and Starbreeze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enad Global and Starbreeze
The main advantage of trading using opposite Enad Global and Starbreeze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enad Global position performs unexpectedly, Starbreeze 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 Starbreeze will offset losses from the drop in Starbreeze's long position.| Enad Global vs. Flexion Mobile PLC | Enad Global vs. iZafe Group AB | Enad Global vs. KABE Group AB | Enad Global vs. IAR Systems Group |
| Starbreeze vs. Flexion Mobile PLC | Starbreeze vs. iZafe Group AB | Starbreeze vs. KABE Group AB | Starbreeze vs. IAR Systems Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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