Correlation Between ENCE Energa and Global Dominion
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Global Dominion 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 Global Dominion 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 Global Dominion Access, you can compare the effects of market volatilities on ENCE Energa and Global Dominion 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 Global Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Global Dominion.
Diversification Opportunities for ENCE Energa and Global Dominion
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENCE and Global is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Global Dominion Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Dominion Access 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 Global Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Dominion Access has no effect on the direction of ENCE Energa i.e., ENCE Energa and Global Dominion go up and down completely randomly.
Pair Corralation between ENCE Energa and Global Dominion
Assuming the 90 days trading horizon ENCE Energa y is expected to generate 1.04 times more return on investment than Global Dominion. However, ENCE Energa is 1.04 times more volatile than Global Dominion Access. It trades about -0.09 of its potential returns per unit of risk. Global Dominion Access is currently generating about -0.12 per unit of risk. If you would invest 298.00 in ENCE Energa y on August 31, 2024 and sell it today you would lose (17.00) from holding ENCE Energa y or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Global Dominion Access
Performance |
| Timeline |
| ENCE Energa y |
| Global Dominion Access |
ENCE Energa and Global Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Global Dominion
The main advantage of trading using opposite ENCE Energa and Global Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Global Dominion 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 Global Dominion will offset losses from the drop in Global Dominion's long position.| ENCE Energa vs. ACS Actividades de | ENCE Energa vs. Mapfre | ENCE Energa vs. Ferrovial | ENCE Energa vs. Indra A |
| Global Dominion vs. CIE Automotive SA | Global Dominion vs. Gestamp Automocion SA | Global Dominion vs. Vidrala SA | Global Dominion vs. Miquel y Costas |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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