Correlation Between Intersport Polska and Enter Air

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

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

Diversification Opportunities for Intersport Polska and Enter Air

0.41

Correlation Coefficient

Intersport Polska  Enter Air

Very weak diversification

The 3 months correlation between Intersport and Enter is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Intersport Polska SA and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA and Intersport Polska 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 Intersport Polska SA are associated (or correlated) with Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of Intersport Polska i.e., Intersport Polska and Enter Air go up and down completely randomly.

Pair Corralation between Intersport Polska and Enter Air

Assuming the 90 days trading horizon Intersport Polska is expected to generate 4.51 times less return on investment than Enter Air. In addition to that, Intersport Polska is 2.33 times more volatile than Enter Air SA. It trades about 0.01 of its total potential returns per unit of risk. Enter Air SA is currently generating about 0.06 per unit of volatility. If you would invest  3,341  in Enter Air SA on November 20, 2024 and sell it today you would earn a total of  2,659  from holding Enter Air SA or generate 79.59% return on investment over 90 days.

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

Intersport Polska SA  vs.  Enter Air SA

Intersport Polska

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intersport Polska SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Enter Air SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enter Air SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Enter Air is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Intersport Polska and Enter Air

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

The idea behind Intersport Polska SA and Enter Air SA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.