Correlation Between Sands China and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Sands China 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 Sands China and ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sands China Ltd and ENN Energy Holdings, you can compare the effects of market volatilities on Sands China 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 Sands China with a short position of ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands China and ENN Energy.
Diversification Opportunities for Sands China and ENN Energy
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sands and ENN is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sands China Ltd 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 Sands China 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 Sands China Ltd 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 Sands China i.e., Sands China and ENN Energy go up and down completely randomly.
Pair Corralation between Sands China and ENN Energy
Assuming the 90 days horizon Sands China Ltd is expected to under-perform the ENN Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sands China Ltd is 1.02 times less risky than ENN Energy. The pink sheet trades about 0.0 of its potential returns per unit of risk. The ENN Energy Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,836 in ENN Energy Holdings on August 28, 2024 and sell it today you would lose (156.00) from holding ENN Energy Holdings or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sands China Ltd vs. ENN Energy Holdings
Performance |
| Timeline |
| Sands China |
| ENN Energy Holdings |
Sands China and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sands China and ENN Energy
The main advantage of trading using opposite Sands China and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands China 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.| Sands China vs. SJM Holdings Ltd | Sands China vs. Studio City International | Sands China vs. Monarch Casino Resort | Sands China vs. Playa Hotels Resorts |
| ENN Energy vs. NewJersey Resources | ENN Energy vs. Atmos Energy | ENN Energy vs. UGI Corporation | ENN Energy vs. Chesapeake Utilities |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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