Correlation Between ENCE Energa and Merlin Properties
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Merlin Properties 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 Merlin Properties 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 Merlin Properties SOCIMI, you can compare the effects of market volatilities on ENCE Energa and Merlin Properties 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 Merlin Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Merlin Properties.
Diversification Opportunities for ENCE Energa and Merlin Properties
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENCE and Merlin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Merlin Properties SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merlin Properties SOCIMI 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 Merlin Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merlin Properties SOCIMI has no effect on the direction of ENCE Energa i.e., ENCE Energa and Merlin Properties go up and down completely randomly.
Pair Corralation between ENCE Energa and Merlin Properties
Assuming the 90 days trading horizon ENCE Energa y is expected to under-perform the Merlin Properties. In addition to that, ENCE Energa is 1.02 times more volatile than Merlin Properties SOCIMI. It trades about -0.01 of its total potential returns per unit of risk. Merlin Properties SOCIMI is currently generating about 0.06 per unit of volatility. If you would invest 740.00 in Merlin Properties SOCIMI on August 29, 2024 and sell it today you would earn a total of 279.00 from holding Merlin Properties SOCIMI or generate 37.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Merlin Properties SOCIMI
Performance |
| Timeline |
| ENCE Energa y |
| Merlin Properties SOCIMI |
ENCE Energa and Merlin Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Merlin Properties
The main advantage of trading using opposite ENCE Energa and Merlin Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Merlin Properties 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 Merlin Properties will offset losses from the drop in Merlin Properties' long position.| ENCE Energa vs. ACS Actividades de | ENCE Energa vs. ArcelorMittal SA | ENCE Energa vs. Mapfre | ENCE Energa vs. Ferrovial |
| Merlin Properties vs. All Iron Re | Merlin Properties vs. Hispanotels Inversiones SOCIMI | Merlin Properties vs. Ebro Foods | Merlin Properties vs. Bankinter |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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