Correlation Between Cenergy Holdings and Miko NV

Can any of the company-specific risk be diversified away by investing in both Cenergy Holdings and Miko NV 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 Miko NV 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 Miko NV, you can compare the effects of market volatilities on Cenergy Holdings and Miko NV 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 Miko NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenergy Holdings and Miko NV.

Diversification Opportunities for Cenergy Holdings and Miko NV

0.58

Correlation Coefficient

Cenergy Holdings  Miko NV

Very weak diversification

The 3 months correlation between Cenergy and Miko is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and Miko NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miko NV 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 Miko NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miko NV has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and Miko NV go up and down completely randomly.

Pair Corralation between Cenergy Holdings and Miko NV

Assuming the 90 days trading horizon Cenergy Holdings is expected to generate 1.28 times less return on investment than Miko NV. In addition to that, Cenergy Holdings is 1.06 times more volatile than Miko NV. It trades about 0.07 of its total potential returns per unit of risk. Miko NV is currently generating about 0.1 per unit of volatility. If you would invest  5,100  in Miko NV on October 24, 2024 and sell it today you would earn a total of  640.00  from holding Miko NV or generate 12.55% return on investment over 90 days.

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

Cenergy Holdings SA  vs.  Miko NV

Cenergy Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cenergy Holdings SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Cenergy Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Miko NV

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Cenergy Holdings and Miko NV

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

The idea behind Cenergy Holdings SA and Miko NV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.