Correlation Between Anaergia and EcoPlus

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

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

Diversification Opportunities for Anaergia and EcoPlus

0.3

Correlation Coefficient

Anaergia  EcoPlus

Weak diversification

The 3 months correlation between Anaergia and EcoPlus is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Anaergia and EcoPlus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoPlus and Anaergia 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 Anaergia are associated (or correlated) with EcoPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoPlus has no effect on the direction of Anaergia i.e., Anaergia and EcoPlus go up and down completely randomly.

Pair Corralation between Anaergia and EcoPlus

Assuming the 90 days horizon Anaergia is expected to generate 0.35 times more return on investment than EcoPlus. However, Anaergia is 2.83 times less risky than EcoPlus. It trades about 0.06 of its potential returns per unit of risk. EcoPlus is currently generating about -0.04 per unit of risk. If you would invest  62.00  in Anaergia on December 30, 2024 and sell it today you would earn a total of  7.00  from holding Anaergia or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.38%
Values	Daily Returns

Anaergia  vs.  EcoPlus

Anaergia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anaergia are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Anaergia reported solid returns over the last few months and may actually be approaching a breakup point.

EcoPlus

Risk-Adjusted Performance

Very Weak

Over the last 90 days EcoPlus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Anaergia and EcoPlus

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

The idea behind Anaergia and EcoPlus 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.