Correlation Between Enersize and Momentum Group
Can any of the company-specific risk be diversified away by investing in both Enersize and Momentum 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 Momentum 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 Momentum Group AB, you can compare the effects of market volatilities on Enersize and Momentum 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 Momentum Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enersize and Momentum Group.
Diversification Opportunities for Enersize and Momentum Group
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enersize and Momentum is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Enersize Oy and Momentum Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentum 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 Momentum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentum Group AB has no effect on the direction of Enersize i.e., Enersize and Momentum Group go up and down completely randomly.
Pair Corralation between Enersize and Momentum Group
Assuming the 90 days trading horizon Enersize Oy is expected to under-perform the Momentum Group. In addition to that, Enersize is 2.15 times more volatile than Momentum Group AB. It trades about -0.13 of its total potential returns per unit of risk. Momentum Group AB is currently generating about 0.07 per unit of volatility. If you would invest 17,820 in Momentum Group AB on October 12, 2024 and sell it today you would earn a total of 340.00 from holding Momentum Group AB or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enersize Oy vs. Momentum Group AB
Performance |
| Timeline |
| Enersize Oy |
| Momentum Group AB |
Enersize and Momentum Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enersize and Momentum Group
The main advantage of trading using opposite Enersize and Momentum Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enersize position performs unexpectedly, Momentum 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 Momentum Group will offset losses from the drop in Momentum Group's long position.The idea behind Enersize Oy and Momentum Group 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.| Momentum Group vs. Bergman Beving AB | Momentum Group vs. Lagercrantz Group AB | Momentum Group vs. AddLife AB | Momentum Group vs. Addtech 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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