Correlation Between Enersize and XMReality

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

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

Diversification Opportunities for Enersize and XMReality

-0.12

Correlation Coefficient

Enersize  XMReality

Good diversification

The 3 months correlation between Enersize and XMReality is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Enersize Oy and XMReality AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XMReality 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 XMReality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XMReality AB has no effect on the direction of Enersize i.e., Enersize and XMReality go up and down completely randomly.

Pair Corralation between Enersize and XMReality

Assuming the 90 days trading horizon Enersize Oy is expected to generate 0.6 times more return on investment than XMReality. However, Enersize Oy is 1.67 times less risky than XMReality. It trades about 0.02 of its potential returns per unit of risk. XMReality AB is currently generating about -0.01 per unit of risk. If you would invest  0.53  in Enersize Oy on September 4, 2024 and sell it today you would lose (0.03) from holding Enersize Oy or give up 5.66% of portfolio value over 90 days.

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

Enersize Oy  vs.  XMReality AB

Enersize Oy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enersize Oy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enersize is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

XMReality AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XMReality AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Enersize and XMReality

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

The idea behind Enersize Oy and XMReality 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.