Correlation Between ENN Energy and NEXTDC
Can any of the company-specific risk be diversified away by investing in both ENN Energy and NEXTDC 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 ENN Energy and NEXTDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENN Energy Holdings and NEXTDC LTD, you can compare the effects of market volatilities on ENN Energy and NEXTDC 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 ENN Energy with a short position of NEXTDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and NEXTDC.
Diversification Opportunities for ENN Energy and NEXTDC
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ENN and NEXTDC is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and NEXTDC LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTDC LTD and ENN 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 ENN Energy Holdings are associated (or correlated) with NEXTDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTDC LTD has no effect on the direction of ENN Energy i.e., ENN Energy and NEXTDC go up and down completely randomly.
Pair Corralation between ENN Energy and NEXTDC
Assuming the 90 days trading horizon ENN Energy Holdings is expected to generate 0.97 times more return on investment than NEXTDC. However, ENN Energy Holdings is 1.03 times less risky than NEXTDC. It trades about 0.02 of its potential returns per unit of risk. NEXTDC LTD is currently generating about -0.1 per unit of risk. If you would invest 665.00 in ENN Energy Holdings on October 11, 2024 and sell it today you would earn a total of 5.00 from holding ENN Energy Holdings or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENN Energy Holdings vs. NEXTDC LTD
Performance |
| Timeline |
| ENN Energy Holdings |
| NEXTDC LTD |
ENN Energy and NEXTDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and NEXTDC
The main advantage of trading using opposite ENN Energy and NEXTDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN Energy position performs unexpectedly, NEXTDC 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 NEXTDC will offset losses from the drop in NEXTDC's long position.| ENN Energy vs. ARISTOCRAT LEISURE | ENN Energy vs. ULTRA CLEAN HLDGS | ENN Energy vs. ALERION CLEANPOWER | ENN Energy vs. PLAYWAY SA ZY 10 |
| NEXTDC vs. CODERE ONLINE LUX | NEXTDC vs. OPKO HEALTH | NEXTDC vs. CITY OFFICE REIT | NEXTDC vs. US Physical Therapy |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |