Correlation Between Entech SE and Afyren SAS
Can any of the company-specific risk be diversified away by investing in both Entech SE and Afyren SAS 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 Entech SE and Afyren SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entech SE SAS and Afyren SAS, you can compare the effects of market volatilities on Entech SE and Afyren SAS 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 Entech SE with a short position of Afyren SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entech SE and Afyren SAS.
Diversification Opportunities for Entech SE and Afyren SAS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Entech and Afyren is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Entech SE SAS and Afyren SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afyren SAS and Entech SE 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 Entech SE SAS are associated (or correlated) with Afyren SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afyren SAS has no effect on the direction of Entech SE i.e., Entech SE and Afyren SAS go up and down completely randomly.
Pair Corralation between Entech SE and Afyren SAS
Assuming the 90 days trading horizon Entech SE SAS is expected to under-perform the Afyren SAS. But the stock apears to be less risky and, when comparing its historical volatility, Entech SE SAS is 1.25 times less risky than Afyren SAS. The stock trades about -0.04 of its potential returns per unit of risk. The Afyren SAS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 520.00 in Afyren SAS on August 31, 2024 and sell it today you would lose (284.00) from holding Afyren SAS or give up 54.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entech SE SAS vs. Afyren SAS
Performance |
| Timeline |
| Entech SE SAS |
| Afyren SAS |
Entech SE and Afyren SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entech SE and Afyren SAS
The main advantage of trading using opposite Entech SE and Afyren SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entech SE position performs unexpectedly, Afyren SAS 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 Afyren SAS will offset losses from the drop in Afyren SAS's long position.| Entech SE vs. Afyren SAS | Entech SE vs. Voltalia SA | Entech SE vs. Waga Energy SA | Entech SE vs. Haffner Energy SA |
| Afyren SAS vs. Sensorion SA | Afyren SAS vs. Fiducial Office Solutions | Afyren SAS vs. Manitou BF SA | Afyren SAS vs. Ossiam Minimum Variance |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |