Correlation Between JM AB and Eniro AB

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

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

Diversification Opportunities for JM AB and Eniro AB

-0.08

Correlation Coefficient

JM AB  Eniro AB

Good diversification

The 3 months correlation between JM AB and Eniro is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding JM AB and Eniro AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eniro AB and JM AB 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 JM AB are associated (or correlated) with Eniro AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eniro AB has no effect on the direction of JM AB i.e., JM AB and Eniro AB go up and down completely randomly.

Pair Corralation between JM AB and Eniro AB

Assuming the 90 days horizon JM AB is expected to under-perform the Eniro AB. But the stock apears to be less risky and, when comparing its historical volatility, JM AB is 1.46 times less risky than Eniro AB. The stock trades about -0.08 of its potential returns per unit of risk. The Eniro AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  43.00  in Eniro AB on August 31, 2024 and sell it today you would earn a total of  3.00  from holding Eniro AB or generate 6.98% return on investment over 90 days.

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

JM AB  vs.  Eniro AB

JM AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JM 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.

Eniro AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eniro AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Eniro AB may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with JM AB and Eniro AB

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

The idea behind JM AB and Eniro 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..