Correlation Between ENCE Energa and Atresmedia Corporacin

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

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

Diversification Opportunities for ENCE Energa and Atresmedia Corporacin

-0.07

Correlation Coefficient

ENCE Energa  Atresmedia Corporacin

Good diversification

The 3 months correlation between ENCE and Atresmedia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Atresmedia Corporacin de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia Corporacin and ENCE Energa 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 ENCE Energa y are associated (or correlated) with Atresmedia Corporacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia Corporacin has no effect on the direction of ENCE Energa i.e., ENCE Energa and Atresmedia Corporacin go up and down completely randomly.

Pair Corralation between ENCE Energa and Atresmedia Corporacin

Assuming the 90 days trading horizon ENCE Energa is expected to generate 4.56 times less return on investment than Atresmedia Corporacin. In addition to that, ENCE Energa is 1.37 times more volatile than Atresmedia Corporacin de. It trades about 0.05 of its total potential returns per unit of risk. Atresmedia Corporacin de is currently generating about 0.3 per unit of volatility. If you would invest  436.00  in Atresmedia Corporacin de on December 30, 2024 and sell it today you would earn a total of  86.00  from holding Atresmedia Corporacin de or generate 19.72% return on investment over 90 days.

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

ENCE Energa y  vs.  Atresmedia Corporacin de

ENCE Energa y

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENCE Energa y are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ENCE Energa is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Atresmedia Corporacin

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atresmedia Corporacin de are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Atresmedia Corporacin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ENCE Energa and Atresmedia Corporacin

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

The idea behind ENCE Energa y and Atresmedia Corporacin de 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.