Correlation Between Techstep ASA and Enea AB

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

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

Diversification Opportunities for Techstep ASA and Enea AB

0.09

Correlation Coefficient

Techstep ASA  Enea AB

Significant diversification

The 3 months correlation between Techstep and Enea is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Techstep ASA and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea AB and Techstep ASA 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 Techstep ASA 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 Techstep ASA i.e., Techstep ASA and Enea AB go up and down completely randomly.

Pair Corralation between Techstep ASA and Enea AB

Assuming the 90 days trading horizon Techstep ASA is expected to generate 1.09 times less return on investment than Enea AB. In addition to that, Techstep ASA is 1.18 times more volatile than Enea AB. It trades about 0.12 of its total potential returns per unit of risk. Enea AB is currently generating about 0.15 per unit of volatility. If you would invest  6,430  in Enea AB on April 24, 2025 and sell it today you would earn a total of  1,210  from holding Enea AB or generate 18.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Techstep ASA  vs.  Enea AB

Techstep ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Techstep ASA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Techstep ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Enea AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enea AB are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enea AB unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Techstep ASA and Enea AB

The main advantage of trading using opposite Techstep ASA and Enea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Techstep ASA 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 Techstep ASA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.