Correlation Between Legrand SA and Enertime SAS
Can any of the company-specific risk be diversified away by investing in both Legrand SA and Enertime SAS 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 Legrand SA and Enertime SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legrand SA and Enertime SAS, you can compare the effects of market volatilities on Legrand SA and Enertime SAS 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 Legrand SA with a short position of Enertime SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legrand SA and Enertime SAS.
Diversification Opportunities for Legrand SA and Enertime SAS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legrand and Enertime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legrand SA and Enertime SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enertime SAS and Legrand SA 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 Legrand SA are associated (or correlated) with Enertime SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enertime SAS has no effect on the direction of Legrand SA i.e., Legrand SA and Enertime SAS go up and down completely randomly.
Pair Corralation between Legrand SA and Enertime SAS
Assuming the 90 days horizon Legrand SA is expected to generate 0.21 times more return on investment than Enertime SAS. However, Legrand SA is 4.78 times less risky than Enertime SAS. It trades about 0.04 of its potential returns per unit of risk. Enertime SAS is currently generating about -0.04 per unit of risk. If you would invest 7,801 in Legrand SA on September 3, 2024 and sell it today you would earn a total of 1,693 from holding Legrand SA or generate 21.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.76% |
| Values | Daily Returns |
Legrand SA vs. Enertime SAS
Performance |
| Timeline |
| Legrand SA |
| Enertime SAS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Legrand SA and Enertime SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legrand SA and Enertime SAS
The main advantage of trading using opposite Legrand SA and Enertime SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legrand SA position performs unexpectedly, Enertime SAS 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 Enertime SAS will offset losses from the drop in Enertime SAS's long position.| Legrand SA vs. Schneider Electric SE | Legrand SA vs. Publicis Groupe SA | Legrand SA vs. Pernod Ricard SA | Legrand SA vs. Compagnie Generale des |
| Enertime SAS vs. Derichebourg | Enertime SAS vs. Mersen SA | Enertime SAS vs. Trigano SA | Enertime SAS vs. Chargeurs SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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