Correlation Between VBG Group and Enea AB

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

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

Diversification Opportunities for VBG Group and Enea AB

0.19

Correlation Coefficient

VBG Group  Enea AB

Average diversification

The 3 months correlation between VBG and Enea is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding VBG Group AB and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea AB and VBG Group 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 VBG Group AB are associated (or correlated) with Enea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea AB has no effect on the direction of VBG Group i.e., VBG Group and Enea AB go up and down completely randomly.

Pair Corralation between VBG Group and Enea AB

Assuming the 90 days trading horizon VBG Group AB is expected to generate 1.1 times more return on investment than Enea AB. However, VBG Group is 1.1 times more volatile than Enea AB. It trades about -0.05 of its potential returns per unit of risk. Enea AB is currently generating about -0.13 per unit of risk. If you would invest  31,200  in VBG Group AB on December 29, 2024 and sell it today you would lose (2,300) from holding VBG Group AB or give up 7.37% of portfolio value over 90 days.

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

VBG Group AB  vs.  Enea AB

VBG Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days VBG Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VBG Group is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Enea AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enea 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with VBG Group and Enea AB

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

The idea behind VBG Group AB and Enea 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.