Correlation Between Danimer Scientific and Enlightify

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

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

Diversification Opportunities for Danimer Scientific and Enlightify

0.82

Correlation Coefficient

Danimer Scientific  Enlightify

Very poor diversification

The 3 months correlation between Danimer and Enlightify is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify and Danimer Scientific 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 Danimer Scientific are associated (or correlated) with Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of Danimer Scientific i.e., Danimer Scientific and Enlightify go up and down completely randomly.

Pair Corralation between Danimer Scientific and Enlightify

Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the Enlightify. In addition to that, Danimer Scientific is 4.06 times more volatile than Enlightify. It trades about -0.19 of its total potential returns per unit of risk. Enlightify is currently generating about -0.19 per unit of volatility. If you would invest  131.00  in Enlightify on October 10, 2024 and sell it today you would lose (24.00) from holding Enlightify or give up 18.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	90.48%
Values	Daily Returns

Danimer Scientific  vs.  Enlightify

Danimer Scientific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Danimer Scientific has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Enlightify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlightify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Danimer Scientific and Enlightify

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

The idea behind Danimer Scientific and Enlightify 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .