Correlation Between Acerinox and Enags SA

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

By analyzing existing cross correlation between Acerinox and Enags SA, you can compare the effects of market volatilities on Acerinox and Enags 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 Acerinox with a short position of Enags SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acerinox and Enags SA.

Diversification Opportunities for Acerinox and Enags SA

0.28

Correlation Coefficient

Acerinox  Enags SA

Modest diversification

The 3 months correlation between Acerinox and Enags is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Acerinox and Enags SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enags SA and Acerinox 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 Acerinox are associated (or correlated) with Enags SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enags SA has no effect on the direction of Acerinox i.e., Acerinox and Enags SA go up and down completely randomly.

Pair Corralation between Acerinox and Enags SA

Assuming the 90 days trading horizon Acerinox is expected to generate 1.86 times more return on investment than Enags SA. However, Acerinox is 1.86 times more volatile than Enags SA. It trades about 0.0 of its potential returns per unit of risk. Enags SA is currently generating about -0.12 per unit of risk. If you would invest  957.00  in Acerinox on September 2, 2024 and sell it today you would lose (6.00) from holding Acerinox or give up 0.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Acerinox  vs.  Enags SA

Acerinox

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acerinox has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Acerinox is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Enags SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enags SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Acerinox and Enags SA

The main advantage of trading using opposite Acerinox and Enags SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acerinox position performs unexpectedly, Enags 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 Enags SA will offset losses from the drop in Enags SA's long position.

The idea behind Acerinox and Enags SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.