Correlation Between Enphase Energy and BK Technologies
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and BK Technologies 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 Enphase Energy and BK Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and BK Technologies, you can compare the effects of market volatilities on Enphase Energy and BK Technologies 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 Enphase Energy with a short position of BK Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and BK Technologies.
Diversification Opportunities for Enphase Energy and BK Technologies
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enphase and BKTI is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and BK Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Technologies and Enphase Energy 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 Enphase Energy are associated (or correlated) with BK Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Technologies has no effect on the direction of Enphase Energy i.e., Enphase Energy and BK Technologies go up and down completely randomly.
Pair Corralation between Enphase Energy and BK Technologies
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the BK Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Enphase Energy is 1.08 times less risky than BK Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The BK Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,425 in BK Technologies on August 23, 2024 and sell it today you would earn a total of 1,951 from holding BK Technologies or generate 136.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. BK Technologies
Performance |
| Timeline |
| Enphase Energy |
| BK Technologies |
Enphase Energy and BK Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and BK Technologies
The main advantage of trading using opposite Enphase Energy and BK Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, BK Technologies 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 BK Technologies will offset losses from the drop in BK Technologies' long position.| Enphase Energy vs. Small Cap Core | Enphase Energy vs. Freedom Holding Corp | Enphase Energy vs. Gfl Environmental Holdings | Enphase Energy vs. Growth Fund Of |
| BK Technologies vs. Frequency Electronics | BK Technologies vs. Actelis Networks | BK Technologies vs. Optical Cable | BK Technologies vs. Lantronix |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |