Correlation Between Enlight Renewable and South Jersey
Can any of the company-specific risk be diversified away by investing in both Enlight Renewable and South Jersey 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 South Jersey 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 South Jersey Industries, you can compare the effects of market volatilities on Enlight Renewable and South Jersey 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 South Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and South Jersey.
Diversification Opportunities for Enlight Renewable and South Jersey
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enlight and South is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and South Jersey Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Jersey Industries 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 South Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Jersey Industries has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and South Jersey go up and down completely randomly.
Pair Corralation between Enlight Renewable and South Jersey
Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 200.13 times more return on investment than South Jersey. However, Enlight Renewable is 200.13 times more volatile than South Jersey Industries. It trades about 0.07 of its potential returns per unit of risk. South Jersey Industries is currently generating about -0.11 per unit of risk. If you would invest 196.00 in Enlight Renewable Energy on September 14, 2024 and sell it today you would earn a total of 1,427 from holding Enlight Renewable Energy or generate 728.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.39% |
| Values | Daily Returns |
Enlight Renewable Energy vs. South Jersey Industries
Performance |
| Timeline |
| Enlight Renewable Energy |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Enlight Renewable and South Jersey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Renewable and South Jersey
The main advantage of trading using opposite Enlight Renewable and South Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable position performs unexpectedly, South Jersey 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 South Jersey will offset losses from the drop in South Jersey's long position.| Enlight Renewable vs. Skechers USA | Enlight Renewable vs. Boot Barn Holdings | Enlight Renewable vs. Under Armour C | Enlight Renewable vs. PVH Corp |
| South Jersey vs. Nok Airlines Public | South Jersey vs. Enlight Renewable Energy | South Jersey vs. Antero Midstream Partners | South Jersey vs. Mesa Air Group |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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