Correlation Between Zaplox AB and Enersize
Can any of the company-specific risk be diversified away by investing in both Zaplox 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 Zaplox AB and Enersize into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zaplox AB and Enersize Oy, you can compare the effects of market volatilities on Zaplox 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 Zaplox AB with a short position of Enersize. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zaplox AB and Enersize.
Diversification Opportunities for Zaplox AB and Enersize
Good diversification
The 3 months correlation between Zaplox and Enersize is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zaplox AB and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and Zaplox 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 Zaplox 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 Zaplox AB i.e., Zaplox AB and Enersize go up and down completely randomly.
Pair Corralation between Zaplox AB and Enersize
Assuming the 90 days trading horizon Zaplox AB is expected to generate 1.19 times less return on investment than Enersize. But when comparing it to its historical volatility, Zaplox AB is 1.07 times less risky than Enersize. It trades about 0.03 of its potential returns per unit of risk. Enersize Oy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 0.85 in Enersize Oy on August 25, 2024 and sell it today you would lose (0.06) from holding Enersize Oy or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zaplox AB vs. Enersize Oy
Performance |
| Timeline |
| Zaplox AB |
| Enersize Oy |
Zaplox AB and Enersize Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zaplox AB and Enersize
The main advantage of trading using opposite Zaplox AB and Enersize positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zaplox 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.| Zaplox AB vs. Lifco AB | Zaplox AB vs. Lagercrantz Group AB | Zaplox AB vs. Addtech AB | Zaplox AB 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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