Correlation Between Softronic and Enea AB
Can any of the company-specific risk be diversified away by investing in both Softronic 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 Softronic and Enea AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softronic AB and Enea AB, you can compare the effects of market volatilities on Softronic 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 Softronic with a short position of Enea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softronic and Enea AB.
Diversification Opportunities for Softronic and Enea AB
Good diversification
The 3 months correlation between Softronic and Enea is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Softronic AB and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea AB and Softronic 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 Softronic 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 Softronic i.e., Softronic and Enea AB go up and down completely randomly.
Pair Corralation between Softronic and Enea AB
Assuming the 90 days trading horizon Softronic is expected to generate 1.11 times less return on investment than Enea AB. But when comparing it to its historical volatility, Softronic AB is 1.6 times less risky than Enea AB. It trades about 0.03 of its potential returns per unit of risk. Enea AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,870 in Enea AB on November 1, 2024 and sell it today you would earn a total of 530.00 from holding Enea AB or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Softronic AB vs. Enea AB
Performance |
| Timeline |
| Softronic AB |
| Enea AB |
Softronic and Enea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softronic and Enea AB
The main advantage of trading using opposite Softronic and Enea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softronic 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.| Softronic vs. eWork Group AB | Softronic vs. Novotek AB | Softronic vs. Prevas AB | Softronic vs. Proact IT Group |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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