Correlation Between Canacol Energy and Enwell Energy

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

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

Diversification Opportunities for Canacol Energy and Enwell Energy

0.0

Correlation Coefficient

Canacol Energy  Enwell Energy

Pay attention - limited upside

The 3 months correlation between Canacol and Enwell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Enwell Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enwell Energy plc and Canacol Energy 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 Canacol Energy are associated (or correlated) with Enwell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enwell Energy plc has no effect on the direction of Canacol Energy i.e., Canacol Energy and Enwell Energy go up and down completely randomly.

Pair Corralation between Canacol Energy and Enwell Energy

Assuming the 90 days horizon Canacol Energy is expected to under-perform the Enwell Energy. But the otc stock apears to be less risky and, when comparing its historical volatility, Canacol Energy is 1.77 times less risky than Enwell Energy. The otc stock trades about -0.06 of its potential returns per unit of risk. The Enwell Energy plc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Enwell Energy plc on October 2, 2024 and sell it today you would lose (21.00) from holding Enwell Energy plc or give up 46.67% of portfolio value over 90 days.

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

Canacol Energy  vs.  Enwell Energy plc

Canacol Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canacol Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Canacol Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Enwell Energy plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enwell Energy plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Enwell Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Canacol Energy and Enwell Energy

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

The idea behind Canacol Energy and Enwell Energy plc 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.

Check out your portfolio center.

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.