Correlation Between Enlight Renewable and FactSet Research

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

Diversification Opportunities for Enlight Renewable and FactSet Research

-0.3

Correlation Coefficient

Enlight Renewable  FactSet Research

Very good diversification

The 3 months correlation between Enlight and FactSet is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and FactSet Research Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FactSet Research Systems 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 FactSet Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FactSet Research Systems has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and FactSet Research go up and down completely randomly.

Pair Corralation between Enlight Renewable and FactSet Research

Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 2.28 times more return on investment than FactSet Research. However, Enlight Renewable is 2.28 times more volatile than FactSet Research Systems. It trades about 0.06 of its potential returns per unit of risk. FactSet Research Systems is currently generating about -0.15 per unit of risk. If you would invest  1,581  in Enlight Renewable Energy on December 20, 2024 and sell it today you would earn a total of  117.00  from holding Enlight Renewable Energy or generate 7.4% return on investment over 90 days.

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

Enlight Renewable Energy  vs.  FactSet Research Systems

Enlight Renewable Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, Enlight Renewable may actually be approaching a critical reversion point that can send shares even higher in April 2025.

FactSet Research Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days FactSet Research Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Enlight Renewable and FactSet Research

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

The idea behind Enlight Renewable Energy and FactSet Research Systems 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.