Correlation Between Energisa and Hypera SA

Can any of the company-specific risk be diversified away by investing in both Energisa and Hypera 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 Hypera 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 Hypera SA, you can compare the effects of market volatilities on Energisa and Hypera 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 Hypera SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Hypera SA.

Diversification Opportunities for Energisa and Hypera SA

0.81

Correlation Coefficient

Energisa  Hypera SA

Very poor diversification

The 3 months correlation between Energisa and Hypera is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera 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 Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Energisa i.e., Energisa and Hypera SA go up and down completely randomly.

Pair Corralation between Energisa and Hypera SA

Assuming the 90 days trading horizon Energisa SA is expected to generate 1.27 times more return on investment than Hypera SA. However, Energisa is 1.27 times more volatile than Hypera SA. It trades about 0.1 of its potential returns per unit of risk. Hypera SA is currently generating about 0.11 per unit of risk. If you would invest  3,684  in Energisa SA on December 27, 2024 and sell it today you would earn a total of  407.00  from holding Energisa SA or generate 11.05% return on investment over 90 days.

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

Energisa SA  vs.  Hypera SA

Energisa SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energisa SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Energisa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Hypera SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hypera SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hypera SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Energisa and Hypera SA

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

The idea behind Energisa SA and Hypera 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.