Correlation Between Eniro AB and Hemnet Group
Can any of the company-specific risk be diversified away by investing in both Eniro AB and Hemnet 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 Eniro AB and Hemnet Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eniro AB and Hemnet Group AB, you can compare the effects of market volatilities on Eniro AB and Hemnet 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 Eniro AB with a short position of Hemnet Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eniro AB and Hemnet Group.
Diversification Opportunities for Eniro AB and Hemnet Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eniro and Hemnet is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Eniro AB and Hemnet Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemnet Group AB and Eniro 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 Eniro AB are associated (or correlated) with Hemnet Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemnet Group AB has no effect on the direction of Eniro AB i.e., Eniro AB and Hemnet Group go up and down completely randomly.
Pair Corralation between Eniro AB and Hemnet Group
Assuming the 90 days trading horizon Eniro AB is expected to generate 2.97 times less return on investment than Hemnet Group. In addition to that, Eniro AB is 1.11 times more volatile than Hemnet Group AB. It trades about 0.11 of its total potential returns per unit of risk. Hemnet Group AB is currently generating about 0.37 per unit of volatility. If you would invest 36,640 in Hemnet Group AB on November 18, 2024 and sell it today you would earn a total of 5,240 from holding Hemnet Group AB or generate 14.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eniro AB vs. Hemnet Group AB
Performance |
| Timeline |
| Eniro AB |
| Hemnet Group AB |
Eniro AB and Hemnet Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eniro AB and Hemnet Group
The main advantage of trading using opposite Eniro AB and Hemnet Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eniro AB position performs unexpectedly, Hemnet 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 Hemnet Group will offset losses from the drop in Hemnet Group's long position.| Eniro AB vs. Alfa Laval AB | Eniro AB vs. JM AB | Eniro AB vs. Anoto Group AB | Eniro AB vs. Active Biotech AB |
| Hemnet Group vs. MIPS AB | Hemnet Group vs. Avanza Bank Holding | Hemnet Group vs. Truecaller AB | Hemnet Group vs. Nordnet 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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