Correlation Between REC Silicon and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both REC Silicon and Ensurge Micropower 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 REC Silicon and Ensurge Micropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REC Silicon ASA and Ensurge Micropower ASA, you can compare the effects of market volatilities on REC Silicon and Ensurge Micropower 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 REC Silicon with a short position of Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC Silicon and Ensurge Micropower.
Diversification Opportunities for REC Silicon and Ensurge Micropower
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between REC and Ensurge is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding REC Silicon ASA and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA and REC Silicon 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 REC Silicon ASA are associated (or correlated) with Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of REC Silicon i.e., REC Silicon and Ensurge Micropower go up and down completely randomly.
Pair Corralation between REC Silicon and Ensurge Micropower
Assuming the 90 days trading horizon REC Silicon ASA is expected to under-perform the Ensurge Micropower. In addition to that, REC Silicon is 1.12 times more volatile than Ensurge Micropower ASA. It trades about -0.05 of its total potential returns per unit of risk. Ensurge Micropower ASA is currently generating about -0.05 per unit of volatility. If you would invest 164.00 in Ensurge Micropower ASA on August 25, 2024 and sell it today you would lose (81.00) from holding Ensurge Micropower ASA or give up 49.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REC Silicon ASA vs. Ensurge Micropower ASA
Performance |
| Timeline |
| REC Silicon ASA |
| Ensurge Micropower ASA |
REC Silicon and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REC Silicon and Ensurge Micropower
The main advantage of trading using opposite REC Silicon and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC Silicon position performs unexpectedly, Ensurge Micropower 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 Ensurge Micropower will offset losses from the drop in Ensurge Micropower's long position.| REC Silicon vs. Aker Horizons AS | REC Silicon vs. MPC Container Ships | REC Silicon vs. Aker Carbon Capture | REC Silicon vs. Nordic Semiconductor ASA |
| Ensurge Micropower vs. Idex ASA | Ensurge Micropower vs. REC Silicon ASA | Ensurge Micropower vs. Aker Horizons AS | Ensurge Micropower vs. Saga Pure ASA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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