Correlation Between Zwipe AS and Enersize

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

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

Diversification Opportunities for Zwipe AS and Enersize

0.66

Correlation Coefficient

Zwipe AS  Enersize

Poor diversification

The 3 months correlation between Zwipe and Enersize is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zwipe AS and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and Zwipe AS 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 Zwipe AS are associated (or correlated) with Enersize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersize Oy has no effect on the direction of Zwipe AS i.e., Zwipe AS and Enersize go up and down completely randomly.

Pair Corralation between Zwipe AS and Enersize

Assuming the 90 days trading horizon Zwipe AS is expected to under-perform the Enersize. In addition to that, Zwipe AS is 2.49 times more volatile than Enersize Oy. It trades about -0.03 of its total potential returns per unit of risk. Enersize Oy is currently generating about -0.02 per unit of volatility. If you would invest  0.65  in Enersize Oy on September 13, 2024 and sell it today you would lose (0.12) from holding Enersize Oy or give up 18.46% of portfolio value over 90 days.

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

Zwipe AS  vs.  Enersize Oy

Zwipe AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zwipe AS 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.

Enersize Oy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enersize Oy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Pair Trading with Zwipe AS and Enersize

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

The idea behind Zwipe AS and Enersize Oy 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.