Correlation Between Energisme and Kerlink SAS

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

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

Diversification Opportunities for Energisme and Kerlink SAS

-0.22

Correlation Coefficient

Energisme  Kerlink SAS

Very good diversification

The 3 months correlation between Energisme and Kerlink is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Energisme and Kerlink SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerlink SAS and Energisme 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 Energisme are associated (or correlated) with Kerlink SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerlink SAS has no effect on the direction of Energisme i.e., Energisme and Kerlink SAS go up and down completely randomly.

Pair Corralation between Energisme and Kerlink SAS

Assuming the 90 days trading horizon Energisme is expected to generate 3.45 times less return on investment than Kerlink SAS. In addition to that, Energisme is 1.02 times more volatile than Kerlink SAS. It trades about 0.0 of its total potential returns per unit of risk. Kerlink SAS is currently generating about 0.01 per unit of volatility. If you would invest  51.00  in Kerlink SAS on September 29, 2024 and sell it today you would lose (1.00) from holding Kerlink SAS or give up 1.96% of portfolio value over 90 days.

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

Energisme  vs.  Kerlink SAS

Energisme

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energisme has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Energisme is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Kerlink SAS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kerlink SAS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kerlink SAS is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Energisme and Kerlink SAS

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

The idea behind Energisme and Kerlink SAS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.