Correlation Between NYSE Composite and Enstar Group
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Enstar Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Enstar Group Ltd, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Enstar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Enstar Group.
Diversification Opportunities for NYSE Composite and Enstar Group
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Enstar is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Enstar Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enstar Group and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Enstar Group go up and down completely randomly.
Pair Corralation between NYSE Composite and Enstar Group
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.45 times more return on investment than Enstar Group. However, NYSE Composite is 2.21 times less risky than Enstar Group. It trades about 0.29 of its potential returns per unit of risk. Enstar Group Ltd is currently generating about -0.11 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Enstar Group Ltd
Performance |
| Timeline |
NYSE Composite and Enstar Group Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Enstar Group Ltd
Pair trading matchups for Enstar Group
Pair Trading with NYSE Composite and Enstar Group
The main advantage of trading using opposite NYSE Composite and Enstar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |