Correlation Between Enersize and 4C Group
Can any of the company-specific risk be diversified away by investing in both Enersize and 4C Group 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 Enersize and 4C Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enersize Oy and 4C Group AB, you can compare the effects of market volatilities on Enersize and 4C Group 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 Enersize with a short position of 4C Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersize and 4C Group.
Diversification Opportunities for Enersize and 4C Group
Very poor diversification
The 3 months correlation between Enersize and 4C Group is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Enersize Oy and 4C Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4C Group AB and Enersize 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 Enersize Oy are associated (or correlated) with 4C Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4C Group AB has no effect on the direction of Enersize i.e., Enersize and 4C Group go up and down completely randomly.
Pair Corralation between Enersize and 4C Group
Assuming the 90 days trading horizon Enersize Oy is expected to under-perform the 4C Group. In addition to that, Enersize is 1.68 times more volatile than 4C Group AB. It trades about -0.24 of its total potential returns per unit of risk. 4C Group AB is currently generating about -0.38 per unit of volatility. If you would invest 1,280 in 4C Group AB on September 25, 2024 and sell it today you would lose (280.00) from holding 4C Group AB or give up 21.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Enersize Oy vs. 4C Group AB
Performance |
| Timeline |
| Enersize Oy |
| 4C Group AB |
Enersize and 4C Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersize and 4C Group
The main advantage of trading using opposite Enersize and 4C Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersize position performs unexpectedly, 4C Group 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 4C Group will offset losses from the drop in 4C Group's long position.| Enersize vs. Lifco AB | Enersize vs. Lagercrantz Group AB | Enersize vs. Instalco Intressenter AB | Enersize vs. AddLife AB |
| 4C Group vs. B3 Consulting Group | 4C Group vs. Sleep Cycle AB | 4C Group vs. Avensia publ AB | 4C Group vs. CAG Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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