Correlation Between Energa Innovacin and Fluidra

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

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

Diversification Opportunities for Energa Innovacin and Fluidra

-0.52

Correlation Coefficient

Energa Innovacin  Fluidra

Excellent diversification

The 3 months correlation between Energa and Fluidra is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Energa Innovacin y and Fluidra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluidra and Energa Innovacin 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 Energa Innovacin y are associated (or correlated) with Fluidra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluidra has no effect on the direction of Energa Innovacin i.e., Energa Innovacin and Fluidra go up and down completely randomly.

Pair Corralation between Energa Innovacin and Fluidra

Assuming the 90 days trading horizon Energa Innovacin y is expected to generate 3.99 times more return on investment than Fluidra. However, Energa Innovacin is 3.99 times more volatile than Fluidra. It trades about 0.29 of its potential returns per unit of risk. Fluidra is currently generating about -0.39 per unit of risk. If you would invest  345.00  in Energa Innovacin y on November 27, 2024 and sell it today you would earn a total of  125.00  from holding Energa Innovacin y or generate 36.23% return on investment over 90 days.

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

Energa Innovacin y  vs.  Fluidra

Energa Innovacin y

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energa Innovacin y are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Energa Innovacin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fluidra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fluidra has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Energa Innovacin and Fluidra

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

The idea behind Energa Innovacin y and Fluidra 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.