Correlation Between Fundamental Global and Enstar Group
Can any of the company-specific risk be diversified away by investing in both Fundamental Global 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 Fundamental Global and Enstar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and Enstar Group Ltd, you can compare the effects of market volatilities on Fundamental Global 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 Fundamental Global with a short position of Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and Enstar Group.
Diversification Opportunities for Fundamental Global and Enstar Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fundamental and Enstar is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global and Enstar Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group and Fundamental Global 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 Fundamental Global 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 Fundamental Global i.e., Fundamental Global and Enstar Group go up and down completely randomly.
Pair Corralation between Fundamental Global and Enstar Group
Assuming the 90 days horizon Fundamental Global is expected to generate 2.8 times more return on investment than Enstar Group. However, Fundamental Global is 2.8 times more volatile than Enstar Group Ltd. It trades about 0.18 of its potential returns per unit of risk. Enstar Group Ltd is currently generating about 0.17 per unit of risk. If you would invest 1,510 in Fundamental Global on October 26, 2024 and sell it today you would earn a total of 227.00 from holding Fundamental Global or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Global vs. Enstar Group Ltd
Performance |
| Timeline |
| Fundamental Global |
| Enstar Group |
Fundamental Global and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and Enstar Group
The main advantage of trading using opposite Fundamental Global and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global 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.| Fundamental Global vs. FAT Brands | Fundamental Global vs. Fortress Biotech Pref | Fundamental Global vs. Fulton Financial |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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