Correlation Between Enphase Energy and New Pacific
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and New Pacific 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 New Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and New Pacific Metals, you can compare the effects of market volatilities on Enphase Energy and New Pacific 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 New Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and New Pacific.
Diversification Opportunities for Enphase Energy and New Pacific
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enphase and New is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals 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 New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of Enphase Energy i.e., Enphase Energy and New Pacific go up and down completely randomly.
Pair Corralation between Enphase Energy and New Pacific
Given the investment horizon of 90 days Enphase Energy is expected to generate 1.46 times more return on investment than New Pacific. However, Enphase Energy is 1.46 times more volatile than New Pacific Metals. It trades about -0.11 of its potential returns per unit of risk. New Pacific Metals is currently generating about -0.22 per unit of risk. If you would invest 8,468 in Enphase Energy on August 27, 2024 and sell it today you would lose (1,277) from holding Enphase Energy or give up 15.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enphase Energy vs. New Pacific Metals
Performance |
| Timeline |
| Enphase Energy |
| New Pacific Metals |
Enphase Energy and New Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enphase Energy and New Pacific
The main advantage of trading using opposite Enphase Energy and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's long position.| Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. Gatos Silver |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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