Correlation Between Cenergy Holdings and Elvalhalcor Hellenic

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

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

Diversification Opportunities for Cenergy Holdings and Elvalhalcor Hellenic

0.78

Correlation Coefficient

Cenergy Holdings  Elvalhalcor Hellenic

Poor diversification

The 3 months correlation between Cenergy and Elvalhalcor is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and Elvalhalcor Hellenic Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elvalhalcor Hellenic and Cenergy Holdings 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 Cenergy Holdings SA are associated (or correlated) with Elvalhalcor Hellenic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elvalhalcor Hellenic has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and Elvalhalcor Hellenic go up and down completely randomly.

Pair Corralation between Cenergy Holdings and Elvalhalcor Hellenic

Assuming the 90 days trading horizon Cenergy Holdings SA is expected to under-perform the Elvalhalcor Hellenic. But the stock apears to be less risky and, when comparing its historical volatility, Cenergy Holdings SA is 1.41 times less risky than Elvalhalcor Hellenic. The stock trades about -0.01 of its potential returns per unit of risk. The Elvalhalcor Hellenic Copper is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  192.00  in Elvalhalcor Hellenic Copper on December 4, 2024 and sell it today you would earn a total of  23.00  from holding Elvalhalcor Hellenic Copper or generate 11.98% return on investment over 90 days.

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

Cenergy Holdings SA  vs.  Elvalhalcor Hellenic Copper

Cenergy Holdings

Risk-Adjusted Performance

Weak

Over the last 90 days Cenergy Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cenergy Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Elvalhalcor Hellenic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elvalhalcor Hellenic Copper are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Elvalhalcor Hellenic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cenergy Holdings and Elvalhalcor Hellenic

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

The idea behind Cenergy Holdings SA and Elvalhalcor Hellenic Copper 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.