Correlation Between Enea AB and Crunchfish
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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enea AB vs. Crunchfish AB
Performance |
| Timeline |
| Enea AB |
| Crunchfish AB |
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.| Enea AB vs. Know IT AB | Enea AB vs. Proact IT Group | Enea AB vs. Hexatronic Group AB | Enea AB vs. Inwido AB |
| Crunchfish vs. Bambuser AB | Crunchfish vs. Maha Energy AB | Crunchfish vs. Cantargia AB | Crunchfish vs. Minesto 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 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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