Correlation Between Eniro AB and Image Systems
Can any of the company-specific risk be diversified away by investing in both Eniro AB and Image Systems 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 Image Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eniro AB and Image Systems AB, you can compare the effects of market volatilities on Eniro AB and Image Systems 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 Image Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eniro AB and Image Systems.
Diversification Opportunities for Eniro AB and Image Systems
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eniro and Image is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Eniro AB and Image Systems AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Image Systems 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 Image Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Image Systems AB has no effect on the direction of Eniro AB i.e., Eniro AB and Image Systems go up and down completely randomly.
Pair Corralation between Eniro AB and Image Systems
Assuming the 90 days trading horizon Eniro AB is expected to generate 4.69 times less return on investment than Image Systems. But when comparing it to its historical volatility, Eniro AB is 1.75 times less risky than Image Systems. It trades about 0.06 of its potential returns per unit of risk. Image Systems AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Image Systems AB on September 12, 2024 and sell it today you would earn a total of 78.00 from holding Image Systems AB or generate 57.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eniro AB vs. Image Systems AB
Performance |
| Timeline |
| Eniro AB |
| Image Systems AB |
Eniro AB and Image Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eniro AB and Image Systems
The main advantage of trading using opposite Eniro AB and Image Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eniro AB position performs unexpectedly, Image Systems 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 Image Systems will offset losses from the drop in Image Systems' long position.| Eniro AB vs. Alfa Laval AB | Eniro AB vs. JM AB | Eniro AB vs. Active Biotech AB | Eniro AB vs. BioInvent International AB |
| Image Systems vs. AB SKF | Image Systems vs. Tele2 AB | Image Systems vs. Sandvik AB | Image Systems vs. Skanska 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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