Correlation Between Easy Software and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Easy Software and ENN Energy 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 Easy Software and ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and ENN Energy Holdings, you can compare the effects of market volatilities on Easy Software and ENN Energy 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 Easy Software with a short position of ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and ENN Energy.
Diversification Opportunities for Easy Software and ENN Energy
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Easy and ENN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings and Easy Software 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 Easy Software AG are associated (or correlated) with ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Easy Software i.e., Easy Software and ENN Energy go up and down completely randomly.
Pair Corralation between Easy Software and ENN Energy
Assuming the 90 days trading horizon Easy Software AG is expected to generate 2.61 times more return on investment than ENN Energy. However, Easy Software is 2.61 times more volatile than ENN Energy Holdings. It trades about 0.13 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about 0.01 per unit of risk. If you would invest 1,630 in Easy Software AG on October 17, 2024 and sell it today you would earn a total of 130.00 from holding Easy Software AG or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Easy Software AG vs. ENN Energy Holdings
Performance |
| Timeline |
| Easy Software AG |
| ENN Energy Holdings |
Easy Software and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and ENN Energy
The main advantage of trading using opposite Easy Software and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's long position.| Easy Software vs. International Game Technology | Easy Software vs. Seven West Media | Easy Software vs. Hochschild Mining plc | Easy Software vs. PLAYMATES TOYS |
| ENN Energy vs. Bio Techne Corp | ENN Energy vs. Minerals Technologies | ENN Energy vs. Easy Software AG | ENN Energy vs. ARROW ELECTRONICS |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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