Correlation Between HMS Networks and Enea AB
Can any of the company-specific risk be diversified away by investing in both HMS Networks and Enea AB 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 HMS Networks and Enea AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMS Networks AB and Enea AB, you can compare the effects of market volatilities on HMS Networks and Enea AB 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 HMS Networks with a short position of Enea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMS Networks and Enea AB.
Diversification Opportunities for HMS Networks and Enea AB
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMS and Enea is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding HMS Networks AB and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea AB and HMS Networks 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 HMS Networks AB are associated (or correlated) with Enea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea AB has no effect on the direction of HMS Networks i.e., HMS Networks and Enea AB go up and down completely randomly.
Pair Corralation between HMS Networks and Enea AB
Assuming the 90 days trading horizon HMS Networks AB is expected to under-perform the Enea AB. In addition to that, HMS Networks is 1.03 times more volatile than Enea AB. It trades about -0.1 of its total potential returns per unit of risk. Enea AB is currently generating about -0.08 per unit of volatility. If you would invest 10,220 in Enea AB on August 30, 2024 and sell it today you would lose (340.00) from holding Enea AB or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMS Networks AB vs. Enea AB
Performance |
| Timeline |
| HMS Networks AB |
| Enea AB |
HMS Networks and Enea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMS Networks and Enea AB
The main advantage of trading using opposite HMS Networks and Enea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMS Networks position performs unexpectedly, Enea AB 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 Enea AB will offset losses from the drop in Enea AB's long position.| HMS Networks vs. Vitec Software Group | HMS Networks vs. Troax Group AB | HMS Networks vs. Sectra AB | HMS Networks vs. Addnode Group AB |
| Enea AB vs. Know IT AB | Enea AB vs. Proact IT Group | Enea AB vs. Hexatronic Group AB | Enea AB vs. Inwido 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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