Correlation Between Ennogie Solar and ALK Abell
Can any of the company-specific risk be diversified away by investing in both Ennogie Solar and ALK Abell 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 Ennogie Solar and ALK Abell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ennogie Solar Group and ALK Abell AS, you can compare the effects of market volatilities on Ennogie Solar and ALK Abell 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 Ennogie Solar with a short position of ALK Abell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ennogie Solar and ALK Abell.
Diversification Opportunities for Ennogie Solar and ALK Abell
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ennogie and ALK is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ennogie Solar Group and ALK Abell AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALK Abell AS and Ennogie Solar 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 Ennogie Solar Group are associated (or correlated) with ALK Abell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALK Abell AS has no effect on the direction of Ennogie Solar i.e., Ennogie Solar and ALK Abell go up and down completely randomly.
Pair Corralation between Ennogie Solar and ALK Abell
Assuming the 90 days trading horizon Ennogie Solar Group is expected to under-perform the ALK Abell. But the stock apears to be less risky and, when comparing its historical volatility, Ennogie Solar Group is 1.07 times less risky than ALK Abell. The stock trades about -0.32 of its potential returns per unit of risk. The ALK Abell AS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 16,550 in ALK Abell AS on August 29, 2024 and sell it today you would lose (460.00) from holding ALK Abell AS or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ennogie Solar Group vs. ALK Abell AS
Performance |
| Timeline |
| Ennogie Solar Group |
| ALK Abell AS |
Ennogie Solar and ALK Abell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ennogie Solar and ALK Abell
The main advantage of trading using opposite Ennogie Solar and ALK Abell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ennogie Solar position performs unexpectedly, ALK Abell 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 ALK Abell will offset losses from the drop in ALK Abell's long position.| Ennogie Solar vs. Green Hydrogen Systems | Ennogie Solar vs. ALK Abell AS | Ennogie Solar vs. H Lundbeck AS | Ennogie Solar vs. TORM plc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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