Correlation Between Stradim Espace and Enogia SAS

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

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

Diversification Opportunities for Stradim Espace and Enogia SAS

-0.08

Correlation Coefficient

Stradim Espace  Enogia SAS

Good diversification

The 3 months correlation between Stradim and Enogia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Stradim Espace Finances and Enogia SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enogia SAS and Stradim Espace 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 Stradim Espace Finances are associated (or correlated) with Enogia SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enogia SAS has no effect on the direction of Stradim Espace i.e., Stradim Espace and Enogia SAS go up and down completely randomly.

Pair Corralation between Stradim Espace and Enogia SAS

Assuming the 90 days trading horizon Stradim Espace is expected to generate 2.61 times less return on investment than Enogia SAS. In addition to that, Stradim Espace is 2.23 times more volatile than Enogia SAS. It trades about 0.04 of its total potential returns per unit of risk. Enogia SAS is currently generating about 0.2 per unit of volatility. If you would invest  177.00  in Enogia SAS on October 8, 2024 and sell it today you would earn a total of  16.00  from holding Enogia SAS or generate 9.04% return on investment over 90 days.

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

Stradim Espace Finances  vs.  Enogia SAS

Stradim Espace Finances

Risk-Adjusted Performance

0 of 100

Very Weak

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

Enogia SAS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enogia SAS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enogia SAS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stradim Espace and Enogia SAS

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

The idea behind Stradim Espace Finances and Enogia 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.