Correlation Between Ensurge Micropower and Vicor
Can any of the company-specific risk be diversified away by investing in both Ensurge Micropower and Vicor 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 Ensurge Micropower and Vicor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ensurge Micropower ASA and Vicor, you can compare the effects of market volatilities on Ensurge Micropower and Vicor 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 Ensurge Micropower with a short position of Vicor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensurge Micropower and Vicor.
Diversification Opportunities for Ensurge Micropower and Vicor
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ensurge and Vicor is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ensurge Micropower ASA and Vicor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicor and Ensurge Micropower 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 Ensurge Micropower ASA are associated (or correlated) with Vicor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicor has no effect on the direction of Ensurge Micropower i.e., Ensurge Micropower and Vicor go up and down completely randomly.
Pair Corralation between Ensurge Micropower and Vicor
Assuming the 90 days horizon Ensurge Micropower ASA is expected to generate 2.78 times more return on investment than Vicor. However, Ensurge Micropower is 2.78 times more volatile than Vicor. It trades about 0.24 of its potential returns per unit of risk. Vicor is currently generating about -0.11 per unit of risk. If you would invest 27.00 in Ensurge Micropower ASA on October 9, 2024 and sell it today you would earn a total of 11.00 from holding Ensurge Micropower ASA or generate 40.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensurge Micropower ASA vs. Vicor
Performance |
| Timeline |
| Ensurge Micropower ASA |
| Vicor |
Ensurge Micropower and Vicor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensurge Micropower and Vicor
The main advantage of trading using opposite Ensurge Micropower and Vicor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensurge Micropower position performs unexpectedly, Vicor 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 Vicor will offset losses from the drop in Vicor's long position.| Ensurge Micropower vs. Vicor | Ensurge Micropower vs. Plexus Corp | Ensurge Micropower vs. Sanmina | Ensurge Micropower vs. Jabil Circuit |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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