Correlation Between Episurf Medical and Enzymatica Publ

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

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

Diversification Opportunities for Episurf Medical and Enzymatica Publ

0.51

Correlation Coefficient

Episurf Medical  Enzymatica Publ

Very weak diversification

The 3 months correlation between Episurf and Enzymatica is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Episurf Medical AB and Enzymatica publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enzymatica publ AB and Episurf Medical 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 Episurf Medical AB are associated (or correlated) with Enzymatica Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enzymatica publ AB has no effect on the direction of Episurf Medical i.e., Episurf Medical and Enzymatica Publ go up and down completely randomly.

Pair Corralation between Episurf Medical and Enzymatica Publ

Assuming the 90 days trading horizon Episurf Medical AB is expected to generate 1.51 times more return on investment than Enzymatica Publ. However, Episurf Medical is 1.51 times more volatile than Enzymatica publ AB. It trades about -0.09 of its potential returns per unit of risk. Enzymatica publ AB is currently generating about -0.17 per unit of risk. If you would invest  18.00  in Episurf Medical AB on September 14, 2024 and sell it today you would lose (5.00) from holding Episurf Medical AB or give up 27.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Episurf Medical AB  vs.  Enzymatica publ AB

Episurf Medical AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Episurf Medical 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 forward 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.

Enzymatica publ AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enzymatica publ AB 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 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.

Pair Trading with Episurf Medical and Enzymatica Publ

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

The idea behind Episurf Medical AB and Enzymatica publ 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.