Correlation Between ENN Energy and COFACE SA
Can any of the company-specific risk be diversified away by investing in both ENN Energy and COFACE 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 ENN Energy and COFACE SA 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 COFACE SA, you can compare the effects of market volatilities on ENN Energy and COFACE 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 ENN Energy with a short position of COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and COFACE SA.
Diversification Opportunities for ENN Energy and COFACE SA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ENN and COFACE is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE SA 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 COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of ENN Energy i.e., ENN Energy and COFACE SA go up and down completely randomly.
Pair Corralation between ENN Energy and COFACE SA
Assuming the 90 days trading horizon ENN Energy is expected to generate 1.69 times less return on investment than COFACE SA. In addition to that, ENN Energy is 1.96 times more volatile than COFACE SA. It trades about 0.02 of its total potential returns per unit of risk. COFACE SA is currently generating about 0.05 per unit of volatility. If you would invest 1,011 in COFACE SA on October 12, 2024 and sell it today you would earn a total of 460.00 from holding COFACE SA or generate 45.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
ENN Energy Holdings vs. COFACE SA
Performance |
| Timeline |
| ENN Energy Holdings |
| COFACE SA |
ENN Energy and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and COFACE SA
The main advantage of trading using opposite ENN Energy and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN Energy position performs unexpectedly, COFACE 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 COFACE SA will offset losses from the drop in COFACE SA'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 |
| COFACE SA vs. AEGEAN AIRLINES | COFACE SA vs. Sixt Leasing SE | COFACE SA vs. Clean Energy Fuels | COFACE SA vs. International Consolidated Airlines |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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