Correlation Between Enlight Renewable and Shemen Industries

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

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

Diversification Opportunities for Enlight Renewable and Shemen Industries

-0.19

Correlation Coefficient

Enlight Renewable  Shemen Industries

Good diversification

The 3 months correlation between Enlight and Shemen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Shemen Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shemen Industries and Enlight Renewable 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 Enlight Renewable Energy are associated (or correlated) with Shemen Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shemen Industries has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and Shemen Industries go up and down completely randomly.

Pair Corralation between Enlight Renewable and Shemen Industries

Assuming the 90 days trading horizon Enlight Renewable Energy is expected to generate 0.84 times more return on investment than Shemen Industries. However, Enlight Renewable Energy is 1.19 times less risky than Shemen Industries. It trades about -0.05 of its potential returns per unit of risk. Shemen Industries is currently generating about -0.08 per unit of risk. If you would invest  629,300  in Enlight Renewable Energy on December 24, 2024 and sell it today you would lose (44,200) from holding Enlight Renewable Energy or give up 7.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Enlight Renewable Energy  vs.  Shemen Industries

Enlight Renewable Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enlight Renewable Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Shemen Industries

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Enlight Renewable and Shemen Industries

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

The idea behind Enlight Renewable Energy and Shemen Industries 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.