Correlation Between Enea AB and Mycronic Publ
Can any of the company-specific risk be diversified away by investing in both Enea AB and Mycronic Publ 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 Mycronic Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enea AB and Mycronic publ AB, you can compare the effects of market volatilities on Enea AB and Mycronic Publ 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 Mycronic Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea AB and Mycronic Publ.
Diversification Opportunities for Enea AB and Mycronic Publ
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enea and Mycronic is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Enea AB and Mycronic publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mycronic publ 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 Mycronic Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mycronic publ AB has no effect on the direction of Enea AB i.e., Enea AB and Mycronic Publ go up and down completely randomly.
Pair Corralation between Enea AB and Mycronic Publ
Assuming the 90 days trading horizon Enea AB is expected to generate 1.17 times more return on investment than Mycronic Publ. However, Enea AB is 1.17 times more volatile than Mycronic publ AB. It trades about -0.07 of its potential returns per unit of risk. Mycronic publ AB is currently generating about -0.15 per unit of risk. If you would invest 10,120 in Enea AB on August 25, 2024 and sell it today you would lose (360.00) from holding Enea AB or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enea AB vs. Mycronic publ AB
Performance |
| Timeline |
| Enea AB |
| Mycronic publ AB |
Enea AB and Mycronic Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enea AB and Mycronic Publ
The main advantage of trading using opposite Enea AB and Mycronic Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea AB position performs unexpectedly, Mycronic Publ 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 Mycronic Publ will offset losses from the drop in Mycronic Publ'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 |
| Mycronic Publ vs. Novotek AB | Mycronic Publ vs. Addnode Group AB | Mycronic Publ vs. Softronic AB | Mycronic Publ vs. CTT Systems 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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