Correlation Between Pepco Group and Enea SA
Can any of the company-specific risk be diversified away by investing in both Pepco Group and Enea SA 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 Pepco Group and Enea SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pepco Group BV and Enea SA, you can compare the effects of market volatilities on Pepco Group and Enea SA 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 Pepco Group with a short position of Enea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pepco Group and Enea SA.
Diversification Opportunities for Pepco Group and Enea SA
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pepco and Enea is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pepco Group BV and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea SA and Pepco Group 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 Pepco Group BV are associated (or correlated) with Enea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea SA has no effect on the direction of Pepco Group i.e., Pepco Group and Enea SA go up and down completely randomly.
Pair Corralation between Pepco Group and Enea SA
Assuming the 90 days trading horizon Pepco Group BV is expected to under-perform the Enea SA. In addition to that, Pepco Group is 1.0 times more volatile than Enea SA. It trades about -0.08 of its total potential returns per unit of risk. Enea SA is currently generating about 0.01 per unit of volatility. If you would invest 1,154 in Enea SA on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Enea SA or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pepco Group BV vs. Enea SA
Performance |
| Timeline |
| Pepco Group BV |
| Enea SA |
Pepco Group and Enea SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pepco Group and Enea SA
The main advantage of trading using opposite Pepco Group and Enea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pepco Group position performs unexpectedly, Enea SA 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 Enea SA will offset losses from the drop in Enea SA's long position.| Pepco Group vs. Bank Millennium SA | Pepco Group vs. PMPG Polskie Media | Pepco Group vs. Noble Financials SA | Pepco Group vs. Globe Trade Centre |
| Enea SA vs. Skyline Investment SA | Enea SA vs. Tower Investments SA | Enea SA vs. Echo Investment SA | Enea SA vs. Mlk Foods Public |
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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