Correlation Between Big 5 and ENSTAR GROUP
Can any of the company-specific risk be diversified away by investing in both Big 5 and ENSTAR GROUP 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 Big 5 and ENSTAR GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big 5 Sporting and ENSTAR GROUP LTD, you can compare the effects of market volatilities on Big 5 and ENSTAR GROUP 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 Big 5 with a short position of ENSTAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big 5 and ENSTAR GROUP.
Diversification Opportunities for Big 5 and ENSTAR GROUP
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Big and ENSTAR is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Big 5 Sporting and ENSTAR GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENSTAR GROUP LTD and Big 5 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 Big 5 Sporting are associated (or correlated) with ENSTAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENSTAR GROUP LTD has no effect on the direction of Big 5 i.e., Big 5 and ENSTAR GROUP go up and down completely randomly.
Pair Corralation between Big 5 and ENSTAR GROUP
Assuming the 90 days horizon Big 5 Sporting is expected to generate 4.46 times more return on investment than ENSTAR GROUP. However, Big 5 is 4.46 times more volatile than ENSTAR GROUP LTD. It trades about 0.05 of its potential returns per unit of risk. ENSTAR GROUP LTD is currently generating about -0.08 per unit of risk. If you would invest 153.00 in Big 5 Sporting on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Big 5 Sporting or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big 5 Sporting vs. ENSTAR GROUP LTD
Performance |
| Timeline |
| Big 5 Sporting |
| ENSTAR GROUP LTD |
Big 5 and ENSTAR GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big 5 and ENSTAR GROUP
The main advantage of trading using opposite Big 5 and ENSTAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big 5 position performs unexpectedly, ENSTAR GROUP 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 ENSTAR GROUP will offset losses from the drop in ENSTAR GROUP's long position.| Big 5 vs. Superior Plus Corp | Big 5 vs. SIVERS SEMICONDUCTORS AB | Big 5 vs. NorAm Drilling AS | Big 5 vs. Norsk Hydro ASA |
| ENSTAR GROUP vs. ZURICH INSURANCE GROUP | ENSTAR GROUP vs. Nissan Chemical Corp | ENSTAR GROUP vs. Siamgas And Petrochemicals | ENSTAR GROUP vs. INDO RAMA SYNTHETIC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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