Correlation Between Sileon AB and Enersize
Can any of the company-specific risk be diversified away by investing in both Sileon AB 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 Sileon AB and Enersize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sileon AB and Enersize Oy, you can compare the effects of market volatilities on Sileon AB 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 Sileon AB with a short position of Enersize. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sileon AB and Enersize.
Diversification Opportunities for Sileon AB and Enersize
Very weak diversification
The 3 months correlation between Sileon and Enersize is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sileon AB and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and Sileon 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 Sileon 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 Sileon AB i.e., Sileon AB and Enersize go up and down completely randomly.
Pair Corralation between Sileon AB and Enersize
Assuming the 90 days trading horizon Sileon AB is expected to under-perform the Enersize. But the stock apears to be less risky and, when comparing its historical volatility, Sileon AB is 1.3 times less risky than Enersize. The stock trades about -0.37 of its potential returns per unit of risk. The Enersize Oy is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 0.61 in Enersize Oy on October 12, 2024 and sell it today you would lose (0.15) from holding Enersize Oy or give up 24.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Sileon AB vs. Enersize Oy
Performance |
| Timeline |
| Sileon AB |
| Enersize Oy |
Sileon AB and Enersize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sileon AB and Enersize
The main advantage of trading using opposite Sileon AB and Enersize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sileon AB 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.| Sileon AB vs. Invisio Communications AB | Sileon AB vs. Online Brands Nordic | Sileon AB vs. Redsense Medical AB | Sileon AB vs. Axfood 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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