Correlation Between APS Energia and Esotiq Henderson
Can any of the company-specific risk be diversified away by investing in both APS Energia and Esotiq Henderson 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 APS Energia and Esotiq Henderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APS Energia SA and Esotiq Henderson SA, you can compare the effects of market volatilities on APS Energia and Esotiq Henderson 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 APS Energia with a short position of Esotiq Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of APS Energia and Esotiq Henderson.
Diversification Opportunities for APS Energia and Esotiq Henderson
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between APS and Esotiq is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding APS Energia SA and Esotiq Henderson SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esotiq Henderson and APS Energia 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 APS Energia SA are associated (or correlated) with Esotiq Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esotiq Henderson has no effect on the direction of APS Energia i.e., APS Energia and Esotiq Henderson go up and down completely randomly.
Pair Corralation between APS Energia and Esotiq Henderson
Assuming the 90 days trading horizon APS Energia SA is expected to generate 2.64 times more return on investment than Esotiq Henderson. However, APS Energia is 2.64 times more volatile than Esotiq Henderson SA. It trades about 0.21 of its potential returns per unit of risk. Esotiq Henderson SA is currently generating about 0.11 per unit of risk. If you would invest 232.00 in APS Energia SA on August 31, 2024 and sell it today you would earn a total of 38.00 from holding APS Energia SA or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
APS Energia SA vs. Esotiq Henderson SA
Performance |
| Timeline |
| APS Energia SA |
| Esotiq Henderson |
APS Energia and Esotiq Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APS Energia and Esotiq Henderson
The main advantage of trading using opposite APS Energia and Esotiq Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APS Energia position performs unexpectedly, Esotiq Henderson 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 Esotiq Henderson will offset losses from the drop in Esotiq Henderson's long position.| APS Energia vs. Asseco Business Solutions | APS Energia vs. Detalion Games SA | APS Energia vs. Asseco South Eastern | APS Energia vs. CFI Holding SA |
| Esotiq Henderson vs. Medicofarma Biotech SA | Esotiq Henderson vs. True Games Syndicate | Esotiq Henderson vs. 3R Games SA | Esotiq Henderson vs. New Tech Venture |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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