Correlation Between SECITS Holding and Enersize
Can any of the company-specific risk be diversified away by investing in both SECITS Holding and Enersize 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 SECITS Holding and Enersize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SECITS Holding AB and Enersize Oy, you can compare the effects of market volatilities on SECITS Holding and Enersize 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 SECITS Holding with a short position of Enersize. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECITS Holding and Enersize.
Diversification Opportunities for SECITS Holding and Enersize
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SECITS and Enersize is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SECITS Holding AB and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and SECITS Holding 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 SECITS Holding AB are associated (or correlated) with Enersize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersize Oy has no effect on the direction of SECITS Holding i.e., SECITS Holding and Enersize go up and down completely randomly.
Pair Corralation between SECITS Holding and Enersize
Assuming the 90 days trading horizon SECITS Holding AB is expected to generate 2.28 times more return on investment than Enersize. However, SECITS Holding is 2.28 times more volatile than Enersize Oy. It trades about 0.02 of its potential returns per unit of risk. Enersize Oy is currently generating about -0.11 per unit of risk. If you would invest 2.68 in SECITS Holding AB on August 29, 2024 and sell it today you would lose (0.70) from holding SECITS Holding AB or give up 26.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECITS Holding AB vs. Enersize Oy
Performance |
| Timeline |
| SECITS Holding AB |
| Enersize Oy |
SECITS Holding and Enersize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECITS Holding and Enersize
The main advantage of trading using opposite SECITS Holding and Enersize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECITS Holding position performs unexpectedly, Enersize 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 Enersize will offset losses from the drop in Enersize's long position.| SECITS Holding vs. Softronic AB | SECITS Holding vs. Prevas AB | SECITS Holding vs. FormPipe Software AB | SECITS Holding vs. Dedicare AB |
| Enersize vs. Lifco AB | Enersize vs. Lagercrantz Group AB | Enersize vs. Addtech AB | Enersize vs. Instalco Intressenter 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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