Correlation Between Enersize and Sileon AB

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

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

Diversification Opportunities for Enersize and Sileon AB

0.81

Correlation Coefficient

Enersize  Sileon AB

Very poor diversification

The 3 months correlation between Enersize and Sileon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enersize Oy and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon AB and Enersize 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 Enersize Oy are associated (or correlated) with Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of Enersize i.e., Enersize and Sileon AB go up and down completely randomly.

Pair Corralation between Enersize and Sileon AB

Assuming the 90 days trading horizon Enersize Oy is expected to generate 0.87 times more return on investment than Sileon AB. However, Enersize Oy is 1.15 times less risky than Sileon AB. It trades about 0.03 of its potential returns per unit of risk. Sileon AB is currently generating about -0.14 per unit of risk. If you would invest  0.53  in Enersize Oy on September 25, 2024 and sell it today you would lose (0.01) from holding Enersize Oy or give up 1.89% of portfolio value over 90 days.

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

Enersize Oy  vs.  Sileon AB

Enersize Oy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sileon AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sileon AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Enersize and Sileon AB

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

The idea behind Enersize Oy and Sileon 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.