Correlation Between ENCE Energa and Azkoyen
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Azkoyen 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 ENCE Energa and Azkoyen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENCE Energa y and Azkoyen, you can compare the effects of market volatilities on ENCE Energa and Azkoyen 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 ENCE Energa with a short position of Azkoyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Azkoyen.
Diversification Opportunities for ENCE Energa and Azkoyen
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ENCE and Azkoyen is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Azkoyen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azkoyen and ENCE Energa 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 ENCE Energa y are associated (or correlated) with Azkoyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azkoyen has no effect on the direction of ENCE Energa i.e., ENCE Energa and Azkoyen go up and down completely randomly.
Pair Corralation between ENCE Energa and Azkoyen
Assuming the 90 days trading horizon ENCE Energa y is expected to generate 1.37 times more return on investment than Azkoyen. However, ENCE Energa is 1.37 times more volatile than Azkoyen. It trades about 0.09 of its potential returns per unit of risk. Azkoyen is currently generating about 0.0 per unit of risk. If you would invest 302.00 in ENCE Energa y on November 3, 2024 and sell it today you would earn a total of 47.00 from holding ENCE Energa y or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Azkoyen
Performance |
| Timeline |
| ENCE Energa y |
| Azkoyen |
ENCE Energa and Azkoyen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Azkoyen
The main advantage of trading using opposite ENCE Energa and Azkoyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Azkoyen 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 Azkoyen will offset losses from the drop in Azkoyen's long position.| ENCE Energa vs. Acerinox | ENCE Energa vs. CIE Automotive SA | ENCE Energa vs. Mapfre | ENCE Energa vs. ArcelorMittal SA |
| Azkoyen vs. Miquel y Costas | Azkoyen vs. Construcciones y Auxiliar | Azkoyen vs. Iberpapel Gestion SA | Azkoyen vs. ENCE Energa y |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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