Correlation Between ENGlobal and Cardno

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

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

Diversification Opportunities for ENGlobal and Cardno

0.0

Correlation Coefficient

ENGlobal  Cardno

Pay attention - limited upside

The 3 months correlation between ENGlobal and Cardno is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ENGlobal and Cardno Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardno Limited and ENGlobal 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 ENGlobal are associated (or correlated) with Cardno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardno Limited has no effect on the direction of ENGlobal i.e., ENGlobal and Cardno go up and down completely randomly.

Pair Corralation between ENGlobal and Cardno

If you would invest  13.00  in Cardno Limited on December 23, 2024 and sell it today you would earn a total of  4.00  from holding Cardno Limited or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ENGlobal  vs.  Cardno Limited

ENGlobal

Risk-Adjusted Performance

Very Weak

Over the last 90 days ENGlobal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ENGlobal is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cardno Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cardno Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cardno reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ENGlobal and Cardno

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

The idea behind ENGlobal and Cardno Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.