Correlation Between Energisa and RB Capital

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

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

Diversification Opportunities for Energisa and RB Capital

0.0

Correlation Coefficient

Energisa  RB Capital

Pay attention - limited upside

The 3 months correlation between Energisa and RBCO11 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and RB Capital Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB Capital Office 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 RB Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB Capital Office has no effect on the direction of Energisa i.e., Energisa and RB Capital go up and down completely randomly.

Pair Corralation between Energisa and RB Capital

If you would invest  4,400  in RB Capital Office on September 11, 2024 and sell it today you would earn a total of  0.00  from holding RB Capital Office or generate 0.0% return on investment over 90 days.

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

Energisa SA  vs.  RB Capital Office

Energisa SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energisa SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

RB Capital Office

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RB Capital Office has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, RB Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Energisa and RB Capital

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

The idea behind Energisa SA and RB Capital Office 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.