Correlation Between Conferize and Ennogie Solar

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

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

Diversification Opportunities for Conferize and Ennogie Solar

0.76

Correlation Coefficient

Conferize  Ennogie Solar

Poor diversification

The 3 months correlation between Conferize and Ennogie is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Conferize AS and Ennogie Solar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennogie Solar Group and Conferize 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 Conferize AS are associated (or correlated) with Ennogie Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennogie Solar Group has no effect on the direction of Conferize i.e., Conferize and Ennogie Solar go up and down completely randomly.

Pair Corralation between Conferize and Ennogie Solar

Assuming the 90 days trading horizon Conferize AS is expected to generate 2.43 times more return on investment than Ennogie Solar. However, Conferize is 2.43 times more volatile than Ennogie Solar Group. It trades about -0.03 of its potential returns per unit of risk. Ennogie Solar Group is currently generating about -0.1 per unit of risk. If you would invest  1.00  in Conferize AS on September 3, 2024 and sell it today you would lose (0.35) from holding Conferize AS or give up 35.0% of portfolio value over 90 days.

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

Conferize AS  vs.  Ennogie Solar Group

Conferize AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conferize AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ennogie Solar Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ennogie Solar Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Conferize and Ennogie Solar

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

The idea behind Conferize AS and Ennogie Solar Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.