Correlation Between Enea AB and Crunchfish

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Can any of the company-specific risk be diversified away by investing in both Enea AB and Crunchfish 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 Crunchfish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enea AB and Crunchfish AB, you can compare the effects of market volatilities on Enea AB and Crunchfish 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 Crunchfish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea AB and Crunchfish.

Diversification Opportunities for Enea AB and Crunchfish

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Enea and Crunchfish is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Enea AB and Crunchfish AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crunchfish AB 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 Crunchfish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crunchfish AB has no effect on the direction of Enea AB i.e., Enea AB and Crunchfish go up and down completely randomly.

Pair Corralation between Enea AB and Crunchfish

Assuming the 90 days trading horizon Enea AB is expected to under-perform the Crunchfish. But the stock apears to be less risky and, when comparing its historical volatility, Enea AB is 2.94 times less risky than Crunchfish. The stock trades about -0.16 of its potential returns per unit of risk. The Crunchfish AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Crunchfish AB on November 27, 2024 and sell it today you would earn a total of  4.00  from holding Crunchfish AB or generate 4.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Enea AB  vs.  Crunchfish AB

 Performance 
       Timeline  
Enea AB 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Enea AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enea AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Crunchfish AB 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Crunchfish AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Enea AB and Crunchfish Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enea AB and Crunchfish

The main advantage of trading using opposite Enea AB and Crunchfish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea AB position performs unexpectedly, Crunchfish 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 Crunchfish will offset losses from the drop in Crunchfish's long position.
The idea behind Enea AB and Crunchfish AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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