Correlation Between ENCE Energa and Duro Felguera
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Duro Felguera 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 Duro Felguera 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 Duro Felguera, you can compare the effects of market volatilities on ENCE Energa and Duro Felguera 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 Duro Felguera. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Duro Felguera.
Diversification Opportunities for ENCE Energa and Duro Felguera
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ENCE and Duro is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Duro Felguera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duro Felguera 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 Duro Felguera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duro Felguera has no effect on the direction of ENCE Energa i.e., ENCE Energa and Duro Felguera go up and down completely randomly.
Pair Corralation between ENCE Energa and Duro Felguera
Assuming the 90 days trading horizon ENCE Energa y is expected to under-perform the Duro Felguera. But the stock apears to be less risky and, when comparing its historical volatility, ENCE Energa y is 7.06 times less risky than Duro Felguera. The stock trades about -0.16 of its potential returns per unit of risk. The Duro Felguera is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Duro Felguera on September 4, 2024 and sell it today you would earn a total of 15.00 from holding Duro Felguera or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Duro Felguera
Performance |
| Timeline |
| ENCE Energa y |
| Duro Felguera |
ENCE Energa and Duro Felguera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Duro Felguera
The main advantage of trading using opposite ENCE Energa and Duro Felguera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Duro Felguera 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 Duro Felguera will offset losses from the drop in Duro Felguera's long position.| ENCE Energa vs. Acerinox | ENCE Energa vs. CIE Automotive SA | ENCE Energa vs. Mapfre | ENCE Energa vs. ArcelorMittal SA |
| Duro Felguera vs. Energy Solar Tech | Duro Felguera vs. Parlem Telecom Companyia | Duro Felguera vs. All Iron Re | Duro Felguera vs. Hispanotels Inversiones SOCIMI |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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