Correlation Between Enwell Energy and PetroShale
Can any of the company-specific risk be diversified away by investing in both Enwell Energy and PetroShale 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 Enwell Energy and PetroShale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enwell Energy plc and PetroShale, you can compare the effects of market volatilities on Enwell Energy and PetroShale 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 Enwell Energy with a short position of PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enwell Energy and PetroShale.
Diversification Opportunities for Enwell Energy and PetroShale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enwell and PetroShale is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enwell Energy plc and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale and Enwell Energy 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 Enwell Energy plc are associated (or correlated) with PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of Enwell Energy i.e., Enwell Energy and PetroShale go up and down completely randomly.
Pair Corralation between Enwell Energy and PetroShale
Assuming the 90 days horizon Enwell Energy plc is expected to generate 2.77 times more return on investment than PetroShale. However, Enwell Energy is 2.77 times more volatile than PetroShale. It trades about -0.01 of its potential returns per unit of risk. PetroShale is currently generating about -0.07 per unit of risk. If you would invest 45.00 in Enwell Energy plc on August 28, 2024 and sell it today you would lose (21.00) from holding Enwell Energy plc or give up 46.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enwell Energy plc vs. PetroShale
Performance |
| Timeline |
| Enwell Energy plc |
| PetroShale |
Enwell Energy and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enwell Energy and PetroShale
The main advantage of trading using opposite Enwell Energy and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enwell Energy position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale's long position.| Enwell Energy vs. Cadence Design Systems | Enwell Energy vs. BJs Restaurants | Enwell Energy vs. Dennys Corp | Enwell Energy vs. Summit Hotel Properties |
| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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