Correlation Between Cardno and ENGlobal
Can any of the company-specific risk be diversified away by investing in both Cardno and ENGlobal 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 Cardno and ENGlobal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardno Limited and ENGlobal, you can compare the effects of market volatilities on Cardno and ENGlobal 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 Cardno with a short position of ENGlobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardno and ENGlobal.
Diversification Opportunities for Cardno and ENGlobal
Very good diversification
The 3 months correlation between Cardno and ENGlobal is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cardno Limited and ENGlobal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGlobal and Cardno 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 Cardno Limited are associated (or correlated) with ENGlobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGlobal has no effect on the direction of Cardno i.e., Cardno and ENGlobal go up and down completely randomly.
Pair Corralation between Cardno and ENGlobal
Assuming the 90 days horizon Cardno Limited is expected to generate 0.64 times more return on investment than ENGlobal. However, Cardno Limited is 1.57 times less risky than ENGlobal. It trades about 0.09 of its potential returns per unit of risk. ENGlobal is currently generating about 0.03 per unit of risk. If you would invest 30.00 in Cardno Limited on November 2, 2024 and sell it today you would lose (13.00) from holding Cardno Limited or give up 43.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.16% |
| Values | Daily Returns |
Cardno Limited vs. ENGlobal
Performance |
| Timeline |
| Cardno Limited |
| ENGlobal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cardno and ENGlobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardno and ENGlobal
The main advantage of trading using opposite Cardno and ENGlobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardno position performs unexpectedly, ENGlobal 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 ENGlobal will offset losses from the drop in ENGlobal's long position.The idea behind Cardno Limited and ENGlobal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ENGlobal vs. Fuel Tech | ENGlobal vs. Polar Power | ENGlobal vs. Ocean Power Technologies | ENGlobal vs. Pioneer Power Solutions |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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