Correlation Between Enea SA and Novavis Group
Can any of the company-specific risk be diversified away by investing in both Enea SA and Novavis 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 Enea SA and Novavis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enea SA and Novavis Group SA, you can compare the effects of market volatilities on Enea SA and Novavis 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 Enea SA with a short position of Novavis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enea SA and Novavis Group.
Diversification Opportunities for Enea SA and Novavis Group
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enea and Novavis is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Enea SA and Novavis Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavis Group SA and Enea SA 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 Enea SA are associated (or correlated) with Novavis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavis Group SA has no effect on the direction of Enea SA i.e., Enea SA and Novavis Group go up and down completely randomly.
Pair Corralation between Enea SA and Novavis Group
Assuming the 90 days trading horizon Enea SA is expected to generate 1.11 times more return on investment than Novavis Group. However, Enea SA is 1.11 times more volatile than Novavis Group SA. It trades about 0.2 of its potential returns per unit of risk. Novavis Group SA is currently generating about -0.17 per unit of risk. If you would invest 1,120 in Enea SA on August 29, 2024 and sell it today you would earn a total of 84.00 from holding Enea SA or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enea SA vs. Novavis Group SA
Performance |
| Timeline |
| Enea SA |
| Novavis Group SA |
Enea SA and Novavis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enea SA and Novavis Group
The main advantage of trading using opposite Enea SA and Novavis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enea SA position performs unexpectedly, Novavis 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 Novavis Group will offset losses from the drop in Novavis Group's long position.| Enea SA vs. 3R Games SA | Enea SA vs. Pyramid Games SA | Enea SA vs. GreenX Metals | Enea SA vs. Movie Games SA |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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