Correlation Between ENFY and Nutrien
Can any of the company-specific risk be diversified away by investing in both ENFY and Nutrien 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 ENFY and Nutrien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENFY and Nutrien, you can compare the effects of market volatilities on ENFY and Nutrien 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 ENFY with a short position of Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENFY and Nutrien.
Diversification Opportunities for ENFY and Nutrien
Very weak diversification
The 3 months correlation between ENFY and Nutrien is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ENFY and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien and ENFY 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 ENFY are associated (or correlated) with Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of ENFY i.e., ENFY and Nutrien go up and down completely randomly.
Pair Corralation between ENFY and Nutrien
Given the investment horizon of 90 days ENFY is expected to under-perform the Nutrien. In addition to that, ENFY is 4.95 times more volatile than Nutrien. It trades about -0.02 of its total potential returns per unit of risk. Nutrien is currently generating about -0.08 per unit of volatility. If you would invest 5,455 in Nutrien on September 3, 2024 and sell it today you would lose (789.00) from holding Nutrien or give up 14.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENFY vs. Nutrien
Performance |
| Timeline |
| ENFY |
| Nutrien |
ENFY and Nutrien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENFY and Nutrien
The main advantage of trading using opposite ENFY and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENFY position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien's long position.| ENFY vs. CF Industries Holdings | ENFY vs. American Vanguard | ENFY vs. FMC Corporation | ENFY vs. ICL Israel Chemicals |
| Nutrien vs. CF Industries Holdings | Nutrien vs. Intrepid Potash | Nutrien vs. Corteva | Nutrien vs. ICL Israel Chemicals |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |