Correlation Between Entech SE and Broadpeak
Can any of the company-specific risk be diversified away by investing in both Entech SE and Broadpeak 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 Broadpeak 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 Broadpeak SA, you can compare the effects of market volatilities on Entech SE and Broadpeak 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 Broadpeak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entech SE and Broadpeak.
Diversification Opportunities for Entech SE and Broadpeak
Almost no diversification
The 3 months correlation between Entech and Broadpeak is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Entech SE SAS and Broadpeak SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadpeak SA 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 Broadpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadpeak SA has no effect on the direction of Entech SE i.e., Entech SE and Broadpeak go up and down completely randomly.
Pair Corralation between Entech SE and Broadpeak
Assuming the 90 days trading horizon Entech SE SAS is expected to under-perform the Broadpeak. In addition to that, Entech SE is 2.29 times more volatile than Broadpeak SA. It trades about -0.15 of its total potential returns per unit of risk. Broadpeak SA is currently generating about -0.27 per unit of volatility. If you would invest 112.00 in Broadpeak SA on August 24, 2024 and sell it today you would lose (14.00) from holding Broadpeak SA or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entech SE SAS vs. Broadpeak SA
Performance |
| Timeline |
| Entech SE SAS |
| Broadpeak SA |
Entech SE and Broadpeak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entech SE and Broadpeak
The main advantage of trading using opposite Entech SE and Broadpeak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entech SE position performs unexpectedly, Broadpeak 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 Broadpeak will offset losses from the drop in Broadpeak'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 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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