Correlation Between ENSTAR GROUP and Equitable Holdings
Can any of the company-specific risk be diversified away by investing in both ENSTAR GROUP and Equitable Holdings 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 ENSTAR GROUP and Equitable Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENSTAR GROUP LTD and Equitable Holdings, you can compare the effects of market volatilities on ENSTAR GROUP and Equitable Holdings 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 ENSTAR GROUP with a short position of Equitable Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENSTAR GROUP and Equitable Holdings.
Diversification Opportunities for ENSTAR GROUP and Equitable Holdings
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ENSTAR and Equitable is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ENSTAR GROUP LTD and Equitable Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Holdings and ENSTAR 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 ENSTAR GROUP LTD are associated (or correlated) with Equitable Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Holdings has no effect on the direction of ENSTAR GROUP i.e., ENSTAR GROUP and Equitable Holdings go up and down completely randomly.
Pair Corralation between ENSTAR GROUP and Equitable Holdings
Assuming the 90 days horizon ENSTAR GROUP LTD is expected to generate 0.31 times more return on investment than Equitable Holdings. However, ENSTAR GROUP LTD is 3.25 times less risky than Equitable Holdings. It trades about 0.06 of its potential returns per unit of risk. Equitable Holdings is currently generating about -0.05 per unit of risk. If you would invest 31,200 in ENSTAR GROUP LTD on November 27, 2024 and sell it today you would earn a total of 200.00 from holding ENSTAR GROUP LTD or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
ENSTAR GROUP LTD vs. Equitable Holdings
Performance |
| Timeline |
| ENSTAR GROUP LTD |
| Equitable Holdings |
ENSTAR GROUP and Equitable Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENSTAR GROUP and Equitable Holdings
The main advantage of trading using opposite ENSTAR GROUP and Equitable Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENSTAR GROUP position performs unexpectedly, Equitable Holdings 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 Equitable Holdings will offset losses from the drop in Equitable Holdings' long position.| ENSTAR GROUP vs. Allianz SE | ENSTAR GROUP vs. ALLIANZ SE UNSPADR | ENSTAR GROUP vs. AXA SA | ENSTAR GROUP vs. ASSGENERALI ADR 12EO |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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