Correlation Between Enlight Renewable and Generation Capital
Can any of the company-specific risk be diversified away by investing in both Enlight Renewable and Generation Capital 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 Enlight Renewable and Generation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Renewable Energy and Generation Capital, you can compare the effects of market volatilities on Enlight Renewable and Generation Capital 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 Enlight Renewable with a short position of Generation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Generation Capital.
Diversification Opportunities for Enlight Renewable and Generation Capital
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enlight and Generation is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital and Enlight Renewable 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 Enlight Renewable Energy are associated (or correlated) with Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and Generation Capital go up and down completely randomly.
Pair Corralation between Enlight Renewable and Generation Capital
Assuming the 90 days trading horizon Enlight Renewable is expected to generate 1.4 times less return on investment than Generation Capital. In addition to that, Enlight Renewable is 1.26 times more volatile than Generation Capital. It trades about 0.09 of its total potential returns per unit of risk. Generation Capital is currently generating about 0.16 per unit of volatility. If you would invest 7,200 in Generation Capital on August 29, 2024 and sell it today you would earn a total of 340.00 from holding Generation Capital or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlight Renewable Energy vs. Generation Capital
Performance |
| Timeline |
| Enlight Renewable Energy |
| Generation Capital |
Enlight Renewable and Generation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Renewable and Generation Capital
The main advantage of trading using opposite Enlight Renewable and Generation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable position performs unexpectedly, Generation Capital 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 Generation Capital will offset losses from the drop in Generation Capital's long position.| Enlight Renewable vs. Energix Renewable Energies | Enlight Renewable vs. Doral Group Renewable | Enlight Renewable vs. Elbit Systems | Enlight Renewable vs. Electreon Wireless |
| Generation Capital vs. EN Shoham Business | Generation Capital vs. Mivtach Shamir | Generation Capital vs. Enlight Renewable Energy | Generation Capital vs. Rani Zim Shopping |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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