Correlation Between ENCE Energa and Unicaja Banco
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Unicaja Banco 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 Unicaja Banco 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 Unicaja Banco SA, you can compare the effects of market volatilities on ENCE Energa and Unicaja Banco 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 Unicaja Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Unicaja Banco.
Diversification Opportunities for ENCE Energa and Unicaja Banco
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENCE and Unicaja is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Unicaja Banco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicaja Banco SA 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 Unicaja Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicaja Banco SA has no effect on the direction of ENCE Energa i.e., ENCE Energa and Unicaja Banco go up and down completely randomly.
Pair Corralation between ENCE Energa and Unicaja Banco
Assuming the 90 days trading horizon ENCE Energa y is expected to under-perform the Unicaja Banco. But the stock apears to be less risky and, when comparing its historical volatility, ENCE Energa y is 1.18 times less risky than Unicaja Banco. The stock trades about -0.07 of its potential returns per unit of risk. The Unicaja Banco SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 133.00 in Unicaja Banco SA on August 31, 2024 and sell it today you would lose (11.00) from holding Unicaja Banco SA or give up 8.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Unicaja Banco SA
Performance |
| Timeline |
| ENCE Energa y |
| Unicaja Banco SA |
ENCE Energa and Unicaja Banco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Unicaja Banco
The main advantage of trading using opposite ENCE Energa and Unicaja Banco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Unicaja Banco 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 Unicaja Banco will offset losses from the drop in Unicaja Banco's long position.| ENCE Energa vs. ACS Actividades de | ENCE Energa vs. Mapfre | ENCE Energa vs. Ferrovial | ENCE Energa vs. Indra A |
| Unicaja Banco vs. Bankinter | Unicaja Banco vs. Banco de Sabadell | Unicaja Banco vs. Caixabank SA | Unicaja Banco 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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