Correlation Between Energisa and Minerva SA

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

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

Diversification Opportunities for Energisa and Minerva SA

0.18

Correlation Coefficient

Energisa  Minerva SA

Average diversification

The 3 months correlation between Energisa and Minerva is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA and Energisa 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 Energisa SA are associated (or correlated) with Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of Energisa i.e., Energisa and Minerva SA go up and down completely randomly.

Pair Corralation between Energisa and Minerva SA

Assuming the 90 days trading horizon Energisa SA is expected to generate 0.55 times more return on investment than Minerva SA. However, Energisa SA is 1.83 times less risky than Minerva SA. It trades about 0.04 of its potential returns per unit of risk. Minerva SA is currently generating about -0.07 per unit of risk. If you would invest  4,100  in Energisa SA on November 20, 2024 and sell it today you would earn a total of  150.00  from holding Energisa SA or generate 3.66% return on investment over 90 days.

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

Energisa SA  vs.  Minerva SA

Energisa SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Energisa SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Energisa is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Minerva SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minerva SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Energisa and Minerva SA

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

The idea behind Energisa SA and Minerva 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.