Correlation Between Ellomay Capital and NEP Old

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

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

Diversification Opportunities for Ellomay Capital and NEP Old

0.28

Correlation Coefficient

Ellomay Capital  NEP Old

Modest diversification

The 3 months correlation between Ellomay and NEP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ellomay Capital and NEP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEP Old and Ellomay Capital 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 Ellomay Capital are associated (or correlated) with NEP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEP Old has no effect on the direction of Ellomay Capital i.e., Ellomay Capital and NEP Old go up and down completely randomly.

Pair Corralation between Ellomay Capital and NEP Old

Given the investment horizon of 90 days Ellomay Capital is expected to generate 0.47 times more return on investment than NEP Old. However, Ellomay Capital is 2.14 times less risky than NEP Old. It trades about 0.0 of its potential returns per unit of risk. NEP Old is currently generating about -0.33 per unit of risk. If you would invest  1,555  in Ellomay Capital on December 29, 2024 and sell it today you would lose (45.00) from holding Ellomay Capital or give up 2.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	37.7%
Values	Daily Returns

Ellomay Capital  vs.  NEP Old

Ellomay Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ellomay Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Ellomay Capital is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

NEP Old

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ellomay Capital and NEP Old

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

The idea behind Ellomay Capital and NEP Old 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.