Correlation Between Enea AB and Bredband2
Can any of the company-specific risk be diversified away by investing in both Enea AB and Bredband2 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 Enea AB and Bredband2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enea AB and Bredband2 i Skandinavien, you can compare the effects of market volatilities on Enea AB and Bredband2 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 Enea AB with a short position of Bredband2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea AB and Bredband2.
Diversification Opportunities for Enea AB and Bredband2
Very good diversification
The 3 months correlation between Enea and Bredband2 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Enea AB and Bredband2 i Skandinavien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bredband2 i Skandinavien and Enea AB 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 Enea AB are associated (or correlated) with Bredband2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bredband2 i Skandinavien has no effect on the direction of Enea AB i.e., Enea AB and Bredband2 go up and down completely randomly.
Pair Corralation between Enea AB and Bredband2
Assuming the 90 days trading horizon Enea AB is expected to generate 2.0 times more return on investment than Bredband2. However, Enea AB is 2.0 times more volatile than Bredband2 i Skandinavien. It trades about 0.1 of its potential returns per unit of risk. Bredband2 i Skandinavien is currently generating about -0.18 per unit of risk. If you would invest 9,900 in Enea AB on September 13, 2024 and sell it today you would earn a total of 400.00 from holding Enea AB or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enea AB vs. Bredband2 i Skandinavien
Performance |
| Timeline |
| Enea AB |
| Bredband2 i Skandinavien |
Enea AB and Bredband2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enea AB and Bredband2
The main advantage of trading using opposite Enea AB and Bredband2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea AB position performs unexpectedly, Bredband2 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 Bredband2 will offset losses from the drop in Bredband2's long position.| Enea AB vs. Know IT AB | Enea AB vs. Proact IT Group | Enea AB vs. Hexatronic Group AB | Enea AB vs. Inwido AB |
| Bredband2 vs. Stillfront Group AB | Bredband2 vs. Paradox Interactive AB | Bredband2 vs. Catena Media plc | Bredband2 vs. Betsson 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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