Correlation Between MAVEN WIRELESS and ENN Energy

Can any of the company-specific risk be diversified away by investing in both MAVEN WIRELESS 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 MAVEN WIRELESS and ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MAVEN WIRELESS SWEDEN and ENN Energy Holdings, you can compare the effects of market volatilities on MAVEN WIRELESS 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 MAVEN WIRELESS with a short position of ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAVEN WIRELESS and ENN Energy.

Diversification Opportunities for MAVEN WIRELESS and ENN Energy

-0.8

Correlation Coefficient

MAVEN WIRELESS  ENN Energy

Pay attention - limited upside

The 3 months correlation between MAVEN and ENN is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS 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 MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS i.e., MAVEN WIRELESS and ENN Energy go up and down completely randomly.

Pair Corralation between MAVEN WIRELESS and ENN Energy

Assuming the 90 days horizon MAVEN WIRELESS SWEDEN is expected to generate 3.3 times more return on investment than ENN Energy. However, MAVEN WIRELESS is 3.3 times more volatile than ENN Energy Holdings. It trades about 0.22 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.17 per unit of risk. If you would invest  85.00  in MAVEN WIRELESS SWEDEN on October 23, 2024 and sell it today you would earn a total of  13.00  from holding MAVEN WIRELESS SWEDEN or generate 15.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

MAVEN WIRELESS SWEDEN  vs.  ENN Energy Holdings

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MAVEN WIRELESS SWEDEN are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MAVEN WIRELESS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ENN Energy Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ENN Energy Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical indicators, ENN Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MAVEN WIRELESS and ENN Energy

The main advantage of trading using opposite MAVEN WIRELESS and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAVEN WIRELESS 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.

The idea behind MAVEN WIRELESS SWEDEN and ENN Energy Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.