Correlation Between Pescanova and Enags SA
Can any of the company-specific risk be diversified away by investing in both Pescanova and Enags 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 Pescanova and Enags SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pescanova SA and Enags SA, you can compare the effects of market volatilities on Pescanova and Enags 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 Pescanova with a short position of Enags SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pescanova and Enags SA.
Diversification Opportunities for Pescanova and Enags SA
Average diversification
The 3 months correlation between Pescanova and Enags is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pescanova SA and Enags SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enags SA and Pescanova 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 Pescanova SA are associated (or correlated) with Enags SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enags SA has no effect on the direction of Pescanova i.e., Pescanova and Enags SA go up and down completely randomly.
Pair Corralation between Pescanova and Enags SA
Assuming the 90 days trading horizon Pescanova SA is expected to generate 5.17 times more return on investment than Enags SA. However, Pescanova is 5.17 times more volatile than Enags SA. It trades about 0.02 of its potential returns per unit of risk. Enags SA is currently generating about -0.04 per unit of risk. If you would invest 37.00 in Pescanova SA on August 31, 2024 and sell it today you would lose (2.00) from holding Pescanova SA or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pescanova SA vs. Enags SA
Performance |
| Timeline |
| Pescanova SA |
| Enags SA |
Pescanova and Enags SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pescanova and Enags SA
The main advantage of trading using opposite Pescanova and Enags SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pescanova position performs unexpectedly, Enags 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 Enags SA will offset losses from the drop in Enags SA's long position.| Pescanova vs. Enags SA | Pescanova vs. Mapfre | Pescanova vs. Cia de Distribucion | Pescanova vs. ACS Actividades de |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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