Correlation Between Energy Absolute and North East
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and North East 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 Energy Absolute and North East into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and North East Rubbers, you can compare the effects of market volatilities on Energy Absolute and North East 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 Energy Absolute with a short position of North East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and North East.
Diversification Opportunities for Energy Absolute and North East
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energy and North is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and North East Rubbers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North East Rubbers and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with North East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North East Rubbers has no effect on the direction of Energy Absolute i.e., Energy Absolute and North East go up and down completely randomly.
Pair Corralation between Energy Absolute and North East
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the North East. In addition to that, Energy Absolute is 1.96 times more volatile than North East Rubbers. It trades about -0.24 of its total potential returns per unit of risk. North East Rubbers is currently generating about 0.06 per unit of volatility. If you would invest 488.00 in North East Rubbers on November 27, 2024 and sell it today you would earn a total of 10.00 from holding North East Rubbers or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Absolute Public vs. North East Rubbers
Performance |
| Timeline |
| Energy Absolute Public |
| North East Rubbers |
Energy Absolute and North East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and North East
The main advantage of trading using opposite Energy Absolute and North East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, North East 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 North East will offset losses from the drop in North East's long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
| North East vs. Sri Trang Agro Industry | North East vs. Jay Mart Public | North East vs. Com7 PCL | North East vs. Energy Absolute Public |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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