Correlation Between PICC Property and ENN Energy
Can any of the company-specific risk be diversified away by investing in both PICC Property 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 PICC Property and ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICC Property and and ENN Energy Holdings, you can compare the effects of market volatilities on PICC Property 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 PICC Property with a short position of ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICC Property and ENN Energy.
Diversification Opportunities for PICC Property and ENN Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PICC and ENN is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PICC Property and 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 PICC Property 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 PICC Property and 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 PICC Property i.e., PICC Property and ENN Energy go up and down completely randomly.
Pair Corralation between PICC Property and ENN Energy
Assuming the 90 days horizon PICC Property and is expected to generate 0.77 times more return on investment than ENN Energy. However, PICC Property and is 1.3 times less risky than ENN Energy. It trades about 0.05 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.04 per unit of risk. If you would invest 2,677 in PICC Property and on August 31, 2024 and sell it today you would earn a total of 1,185 from holding PICC Property and or generate 44.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
PICC Property and vs. ENN Energy Holdings
Performance |
| Timeline |
| PICC Property |
| ENN Energy Holdings |
PICC Property and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICC Property and ENN Energy
The main advantage of trading using opposite PICC Property and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICC Property 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.The idea behind PICC Property and and ENN Energy Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ENN Energy vs. Atmos Energy | ENN Energy vs. LCI Industries | ENN Energy vs. Golden Agri Resources | ENN Energy vs. Empire State Realty |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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