Correlation Between Enter Air and HomeToGo

Can any of the company-specific risk be diversified away by investing in both Enter Air and HomeToGo 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 Enter Air and HomeToGo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enter Air SA and HomeToGo SE, you can compare the effects of market volatilities on Enter Air and HomeToGo 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 Enter Air with a short position of HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and HomeToGo.

Diversification Opportunities for Enter Air and HomeToGo

0.0

Correlation Coefficient

Enter Air  HomeToGo

Pay attention - limited upside

The 3 months correlation between Enter and HomeToGo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE and Enter Air 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 Enter Air SA are associated (or correlated) with HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Enter Air i.e., Enter Air and HomeToGo go up and down completely randomly.

Pair Corralation between Enter Air and HomeToGo

Assuming the 90 days trading horizon Enter Air SA is expected to generate 0.54 times more return on investment than HomeToGo. However, Enter Air SA is 1.84 times less risky than HomeToGo. It trades about 0.05 of its potential returns per unit of risk. HomeToGo SE is currently generating about -0.07 per unit of risk. If you would invest  1,212  in Enter Air SA on November 29, 2024 and sell it today you would earn a total of  56.00  from holding Enter Air SA or generate 4.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enter Air SA  vs.  HomeToGo SE

Enter Air SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enter Air SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enter Air is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

HomeToGo SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days HomeToGo SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Enter Air and HomeToGo

The main advantage of trading using opposite Enter Air and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.

The idea behind Enter Air SA and HomeToGo SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.