Correlation Between Enlight Renewable and Simon Property

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

Diversification Opportunities for Enlight Renewable and Simon Property

0.24

Correlation Coefficient

Enlight Renewable  Simon Property

Modest diversification

The 3 months correlation between Enlight and Simon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group 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 Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and Simon Property go up and down completely randomly.

Pair Corralation between Enlight Renewable and Simon Property

Given the investment horizon of 90 days Enlight Renewable Energy is expected to under-perform the Simon Property. In addition to that, Enlight Renewable is 1.89 times more volatile than Simon Property Group. It trades about 0.0 of its total potential returns per unit of risk. Simon Property Group is currently generating about 0.1 per unit of volatility. If you would invest  11,411  in Simon Property Group on September 12, 2024 and sell it today you would earn a total of  6,512  from holding Simon Property Group or generate 57.07% return on investment over 90 days.

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

Enlight Renewable Energy  vs.  Simon Property Group

Enlight Renewable Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlight Renewable Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Enlight Renewable is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Simon Property Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simon Property Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Simon Property may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Enlight Renewable and Simon Property

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

The idea behind Enlight Renewable Energy and Simon Property Group 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.