Correlation Between Equitable Holdings and Enstar Group
Can any of the company-specific risk be diversified away by investing in both Equitable Holdings and Enstar Group 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 Equitable Holdings and Enstar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Holdings and Enstar Group Ltd, you can compare the effects of market volatilities on Equitable Holdings and Enstar Group 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 Equitable Holdings with a short position of Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and Enstar Group.
Diversification Opportunities for Equitable Holdings and Enstar Group
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Equitable and Enstar is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and Enstar Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group and Equitable Holdings 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 Equitable Holdings are associated (or correlated) with Enstar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enstar Group has no effect on the direction of Equitable Holdings i.e., Equitable Holdings and Enstar Group go up and down completely randomly.
Pair Corralation between Equitable Holdings and Enstar Group
Assuming the 90 days trading horizon Equitable Holdings is expected to under-perform the Enstar Group. But the preferred stock apears to be less risky and, when comparing its historical volatility, Equitable Holdings is 1.44 times less risky than Enstar Group. The preferred stock trades about -0.02 of its potential returns per unit of risk. The Enstar Group Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,043 in Enstar Group Ltd on October 25, 2024 and sell it today you would earn a total of 16.00 from holding Enstar Group Ltd or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
Equitable Holdings vs. Enstar Group Ltd
Performance |
| Timeline |
| Equitable Holdings |
| Enstar Group |
Equitable Holdings and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitable Holdings and Enstar Group
The main advantage of trading using opposite Equitable Holdings and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable Holdings position performs unexpectedly, Enstar Group 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 Enstar Group will offset losses from the drop in Enstar Group's long position.| Equitable Holdings vs. Equitable Holdings | Equitable Holdings vs. Athene Holding | Equitable Holdings vs. MetLife Preferred Stock | Equitable Holdings vs. Bank of America |
| Enstar Group vs. Enstar Group Limited | Enstar Group vs. Equitable Holdings | Enstar Group vs. Athene Holding | Enstar Group vs. Athene Holding |
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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