Correlation Between Enlight Corp and Jean
Can any of the company-specific risk be diversified away by investing in both Enlight Corp and Jean 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 Enlight Corp and Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Corp and Jean Co, you can compare the effects of market volatilities on Enlight Corp and Jean 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 Enlight Corp with a short position of Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Corp and Jean.
Diversification Opportunities for Enlight Corp and Jean
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enlight and Jean is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Corp and Jean Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jean and Enlight Corp 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 Enlight Corp are associated (or correlated) with Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jean has no effect on the direction of Enlight Corp i.e., Enlight Corp and Jean go up and down completely randomly.
Pair Corralation between Enlight Corp and Jean
Assuming the 90 days trading horizon Enlight Corp is expected to generate 1.27 times more return on investment than Jean. However, Enlight Corp is 1.27 times more volatile than Jean Co. It trades about 0.09 of its potential returns per unit of risk. Jean Co is currently generating about 0.06 per unit of risk. If you would invest 1,350 in Enlight Corp on September 3, 2024 and sell it today you would earn a total of 2,725 from holding Enlight Corp or generate 201.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlight Corp vs. Jean Co
Performance |
| Timeline |
| Enlight Corp |
| Jean |
Enlight Corp and Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Corp and Jean
The main advantage of trading using opposite Enlight Corp and Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Corp position performs unexpectedly, Jean 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 Jean will offset losses from the drop in Jean's long position.| Enlight Corp vs. Taiwan Semiconductor Manufacturing | Enlight Corp vs. Yang Ming Marine | Enlight Corp vs. ASE Industrial Holding | Enlight Corp vs. AU Optronics |
| Jean vs. Tainan Spinning Co | Jean vs. Chia Her Industrial | Jean vs. WiseChip Semiconductor | Jean vs. Novatek Microelectronics Corp |
Check out your portfolio center.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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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