Correlation Between BIMobject and Enea AB

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

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

Diversification Opportunities for BIMobject and Enea AB

0.51

Correlation Coefficient

BIMobject  Enea AB

Very weak diversification

The 3 months correlation between BIMobject and Enea is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BIMobject AB and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea AB and BIMobject 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 BIMobject 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 BIMobject i.e., BIMobject and Enea AB go up and down completely randomly.

Pair Corralation between BIMobject and Enea AB

Assuming the 90 days trading horizon BIMobject is expected to generate 3.19 times less return on investment than Enea AB. But when comparing it to its historical volatility, BIMobject AB is 1.06 times less risky than Enea AB. It trades about 0.06 of its potential returns per unit of risk. Enea AB is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,980  in Enea AB on October 8, 2024 and sell it today you would earn a total of  5,160  from holding Enea AB or generate 103.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BIMobject AB  vs.  Enea AB

BIMobject AB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BIMobject AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, BIMobject is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Enea AB

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enea AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enea AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BIMobject and Enea AB

The main advantage of trading using opposite BIMobject and Enea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIMobject 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.

The idea behind BIMobject AB and Enea AB 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.