Correlation Between Enea SA and Lubelski Wegiel

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

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

Diversification Opportunities for Enea SA and Lubelski Wegiel

-0.15

Correlation Coefficient

Enea SA  Lubelski Wegiel

Good diversification

The 3 months correlation between Enea and Lubelski is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enea SA and Lubelski Wegiel Bogdanka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lubelski Wegiel Bogdanka 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 Lubelski Wegiel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lubelski Wegiel Bogdanka has no effect on the direction of Enea SA i.e., Enea SA and Lubelski Wegiel go up and down completely randomly.

Pair Corralation between Enea SA and Lubelski Wegiel

Assuming the 90 days trading horizon Enea SA is expected to generate 1.28 times less return on investment than Lubelski Wegiel. But when comparing it to its historical volatility, Enea SA is 1.61 times less risky than Lubelski Wegiel. It trades about 0.46 of its potential returns per unit of risk. Lubelski Wegiel Bogdanka is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  2,044  in Lubelski Wegiel Bogdanka on October 23, 2024 and sell it today you would earn a total of  284.00  from holding Lubelski Wegiel Bogdanka or generate 13.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Enea SA  vs.  Lubelski Wegiel Bogdanka

Enea SA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enea SA are ranked lower than 19 (%) 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.

Lubelski Wegiel Bogdanka

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lubelski Wegiel Bogdanka are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Lubelski Wegiel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Enea SA and Lubelski Wegiel

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

The idea behind Enea SA and Lubelski Wegiel Bogdanka 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.