Correlation Between Enovix Corp and Alfen NV
Can any of the company-specific risk be diversified away by investing in both Enovix Corp and Alfen NV 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 Enovix Corp and Alfen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovix Corp and Alfen NV, you can compare the effects of market volatilities on Enovix Corp and Alfen NV 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 Enovix Corp with a short position of Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and Alfen NV.
Diversification Opportunities for Enovix Corp and Alfen NV
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enovix and Alfen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and Enovix Corp 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 Enovix Corp are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Enovix Corp i.e., Enovix Corp and Alfen NV go up and down completely randomly.
Pair Corralation between Enovix Corp and Alfen NV
Given the investment horizon of 90 days Enovix Corp is expected to under-perform the Alfen NV. In addition to that, Enovix Corp is 1.75 times more volatile than Alfen NV. It trades about -0.13 of its total potential returns per unit of risk. Alfen NV is currently generating about -0.22 per unit of volatility. If you would invest 700.00 in Alfen NV on August 28, 2024 and sell it today you would lose (100.00) from holding Alfen NV or give up 14.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Enovix Corp vs. Alfen NV
Performance |
Timeline |
Enovix Corp |
Alfen NV |
Enovix Corp and Alfen NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enovix Corp and Alfen NV
The main advantage of trading using opposite Enovix Corp and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp position performs unexpectedly, Alfen NV 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 Alfen NV will offset losses from the drop in Alfen NV's long position.Enovix Corp vs. Bloom Energy Corp | Enovix Corp vs. Eos Energy Enterprises | Enovix Corp vs. Sunrise New Energy | Enovix Corp vs. GrafTech International |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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