Correlation Between Enlight Renewable and CureVac NV

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

Diversification Opportunities for Enlight Renewable and CureVac NV

0.59

Correlation Coefficient

Enlight Renewable  CureVac NV

Very weak diversification

The 3 months correlation between Enlight and CureVac is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and CureVac NV go up and down completely randomly.

Pair Corralation between Enlight Renewable and CureVac NV

Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 6.25 times more return on investment than CureVac NV. However, Enlight Renewable is 6.25 times more volatile than CureVac NV. It trades about 0.05 of its potential returns per unit of risk. CureVac NV is currently generating about -0.03 per unit of risk. If you would invest  260.00  in Enlight Renewable Energy on October 26, 2024 and sell it today you would earn a total of  1,379  from holding Enlight Renewable Energy or generate 530.38% return on investment over 90 days.

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

Enlight Renewable Energy  vs.  CureVac NV

Enlight Renewable Energy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Enlight Renewable is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

CureVac NV

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, CureVac NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enlight Renewable and CureVac NV

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

The idea behind Enlight Renewable Energy and CureVac NV 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 Stocks Directory module to find actively traded stocks across global markets.