Correlation Between Enea SA and Kruk SA

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

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

Diversification Opportunities for Enea SA and Kruk SA

-0.25

Correlation Coefficient

Enea SA  Kruk SA

Very good diversification

The 3 months correlation between Enea and Kruk is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Enea SA and Kruk SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kruk SA and Enea SA 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 Enea SA are associated (or correlated) with Kruk SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kruk SA has no effect on the direction of Enea SA i.e., Enea SA and Kruk SA go up and down completely randomly.

Pair Corralation between Enea SA and Kruk SA

Assuming the 90 days trading horizon Enea SA is expected to generate 1.42 times more return on investment than Kruk SA. However, Enea SA is 1.42 times more volatile than Kruk SA. It trades about 0.21 of its potential returns per unit of risk. Kruk SA is currently generating about 0.0 per unit of risk. If you would invest  1,105  in Enea SA on October 24, 2024 and sell it today you would earn a total of  265.00  from holding Enea SA or generate 23.98% return on investment over 90 days.

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

Enea SA  vs.  Kruk SA

Enea SA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enea SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enea SA reported solid returns over the last few months and may actually be approaching a breakup point.

Kruk SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kruk SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kruk SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Enea SA and Kruk SA

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

The idea behind Enea SA and Kruk SA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.