Correlation Between Enorama Pharma and Dignitana
Can any of the company-specific risk be diversified away by investing in both Enorama Pharma and Dignitana 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 Enorama Pharma and Dignitana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enorama Pharma AB and Dignitana AB, you can compare the effects of market volatilities on Enorama Pharma and Dignitana 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 Enorama Pharma with a short position of Dignitana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enorama Pharma and Dignitana.
Diversification Opportunities for Enorama Pharma and Dignitana
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enorama and Dignitana is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enorama Pharma AB and Dignitana AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dignitana AB and Enorama Pharma 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 Enorama Pharma AB are associated (or correlated) with Dignitana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dignitana AB has no effect on the direction of Enorama Pharma i.e., Enorama Pharma and Dignitana go up and down completely randomly.
Pair Corralation between Enorama Pharma and Dignitana
Assuming the 90 days trading horizon Enorama Pharma AB is expected to generate 1.56 times more return on investment than Dignitana. However, Enorama Pharma is 1.56 times more volatile than Dignitana AB. It trades about 0.04 of its potential returns per unit of risk. Dignitana AB is currently generating about -0.03 per unit of risk. If you would invest 420.00 in Enorama Pharma AB on August 26, 2024 and sell it today you would lose (43.00) from holding Enorama Pharma AB or give up 10.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enorama Pharma AB vs. Dignitana AB
Performance |
| Timeline |
| Enorama Pharma AB |
| Dignitana AB |
Enorama Pharma and Dignitana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enorama Pharma and Dignitana
The main advantage of trading using opposite Enorama Pharma and Dignitana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enorama Pharma position performs unexpectedly, Dignitana 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 Dignitana will offset losses from the drop in Dignitana's long position.| Enorama Pharma vs. Stille AB | Enorama Pharma vs. Midsona AB | Enorama Pharma vs. C Rad AB | Enorama Pharma vs. Novotek AB |
| Dignitana vs. C Rad AB | Dignitana vs. Paxman AB | Dignitana vs. Enzymatica publ AB | Dignitana vs. Episurf Medical 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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