Correlation Between Enter Air and TEN SQUARE

Can any of the company-specific risk be diversified away by investing in both Enter Air and TEN SQUARE 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 TEN SQUARE 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 TEN SQUARE GAMES, you can compare the effects of market volatilities on Enter Air and TEN SQUARE 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 TEN SQUARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and TEN SQUARE.

Diversification Opportunities for Enter Air and TEN SQUARE

0.74

Correlation Coefficient

Enter Air  TEN SQUARE

Poor diversification

The 3 months correlation between Enter and TEN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and TEN SQUARE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEN SQUARE GAMES 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 TEN SQUARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEN SQUARE GAMES has no effect on the direction of Enter Air i.e., Enter Air and TEN SQUARE go up and down completely randomly.

Pair Corralation between Enter Air and TEN SQUARE

Assuming the 90 days trading horizon Enter Air is expected to generate 1.59 times less return on investment than TEN SQUARE. But when comparing it to its historical volatility, Enter Air SA is 1.48 times less risky than TEN SQUARE. It trades about 0.16 of its potential returns per unit of risk. TEN SQUARE GAMES is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,280  in TEN SQUARE GAMES on December 26, 2024 and sell it today you would earn a total of  1,720  from holding TEN SQUARE GAMES or generate 23.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Enter Air SA  vs.  TEN SQUARE GAMES

Enter Air SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enter Air SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enter Air reported solid returns over the last few months and may actually be approaching a breakup point.

TEN SQUARE GAMES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TEN SQUARE GAMES are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, TEN SQUARE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enter Air and TEN SQUARE

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

The idea behind Enter Air SA and TEN SQUARE GAMES 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.