Correlation Between Eniro AB and Northbaze Group
Can any of the company-specific risk be diversified away by investing in both Eniro AB and Northbaze 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 Northbaze 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 Northbaze Group AB, you can compare the effects of market volatilities on Eniro AB and Northbaze 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 Northbaze Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eniro AB and Northbaze Group.
Diversification Opportunities for Eniro AB and Northbaze Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eniro and Northbaze is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Eniro AB and Northbaze Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northbaze 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 Northbaze Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northbaze Group AB has no effect on the direction of Eniro AB i.e., Eniro AB and Northbaze Group go up and down completely randomly.
Pair Corralation between Eniro AB and Northbaze Group
Assuming the 90 days trading horizon Eniro AB is expected to generate 0.19 times more return on investment than Northbaze Group. However, Eniro AB is 5.23 times less risky than Northbaze Group. It trades about 0.08 of its potential returns per unit of risk. Northbaze Group AB is currently generating about 0.0 per unit of risk. If you would invest 45.00 in Eniro AB on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Eniro AB or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eniro AB vs. Northbaze Group AB
Performance |
| Timeline |
| Eniro AB |
| Northbaze Group AB |
Eniro AB and Northbaze Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eniro AB and Northbaze Group
The main advantage of trading using opposite Eniro AB and Northbaze Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eniro AB position performs unexpectedly, Northbaze 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 Northbaze Group will offset losses from the drop in Northbaze Group's long position.| Eniro AB vs. Tele2 AB | Eniro AB vs. Swedbank AB | Eniro AB vs. Svenska Handelsbanken AB | Eniro AB vs. Nordea Bank Abp |
| Northbaze Group vs. Anoto Group AB | Northbaze Group vs. Bong AB | Northbaze Group vs. Episurf Medical AB | Northbaze Group vs. Eniro 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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