Correlation Between FormPipe Software and Enad Global
Can any of the company-specific risk be diversified away by investing in both FormPipe Software and Enad Global 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 FormPipe Software and Enad Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormPipe Software AB and Enad Global 7, you can compare the effects of market volatilities on FormPipe Software and Enad Global 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 FormPipe Software with a short position of Enad Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormPipe Software and Enad Global.
Diversification Opportunities for FormPipe Software and Enad Global
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FormPipe and Enad is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding FormPipe Software AB and Enad Global 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enad Global 7 and FormPipe Software 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 FormPipe Software AB are associated (or correlated) with Enad Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enad Global 7 has no effect on the direction of FormPipe Software i.e., FormPipe Software and Enad Global go up and down completely randomly.
Pair Corralation between FormPipe Software and Enad Global
Assuming the 90 days trading horizon FormPipe Software AB is expected to generate 0.72 times more return on investment than Enad Global. However, FormPipe Software AB is 1.39 times less risky than Enad Global. It trades about 0.02 of its potential returns per unit of risk. Enad Global 7 is currently generating about -0.02 per unit of risk. If you would invest 2,140 in FormPipe Software AB on August 29, 2024 and sell it today you would earn a total of 340.00 from holding FormPipe Software AB or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormPipe Software AB vs. Enad Global 7
Performance |
| Timeline |
| FormPipe Software |
| Enad Global 7 |
FormPipe Software and Enad Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormPipe Software and Enad Global
The main advantage of trading using opposite FormPipe Software and Enad Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormPipe Software position performs unexpectedly, Enad Global 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 Enad Global will offset losses from the drop in Enad Global's long position.| FormPipe Software vs. Enea AB | FormPipe Software vs. Novotek AB | FormPipe Software vs. Addnode Group AB | FormPipe Software vs. Softronic AB |
| Enad Global vs. Stillfront Group AB | Enad Global vs. Embracer Group AB | Enad Global vs. G5 Entertainment publ | Enad Global vs. Sinch 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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