Correlation Between Ensurge Micropower and Ensurge Micropower

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

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

Diversification Opportunities for Ensurge Micropower and Ensurge Micropower

0.64

Correlation Coefficient

Ensurge Micropower  Ensurge Micropower

Poor diversification

The 3 months correlation between Ensurge and Ensurge is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ensurge Micropower ASA and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA and Ensurge Micropower 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 Ensurge Micropower ASA are associated (or correlated) with Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of Ensurge Micropower i.e., Ensurge Micropower and Ensurge Micropower go up and down completely randomly.

Pair Corralation between Ensurge Micropower and Ensurge Micropower

Assuming the 90 days horizon Ensurge Micropower ASA is expected to generate 0.78 times more return on investment than Ensurge Micropower. However, Ensurge Micropower ASA is 1.29 times less risky than Ensurge Micropower. It trades about 0.22 of its potential returns per unit of risk. Ensurge Micropower ASA is currently generating about 0.16 per unit of risk. If you would invest  9.40  in Ensurge Micropower ASA on December 5, 2024 and sell it today you would earn a total of  4.60  from holding Ensurge Micropower ASA or generate 48.94% return on investment over 90 days.

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

Ensurge Micropower ASA  vs.  Ensurge Micropower ASA

Ensurge Micropower ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ensurge Micropower ASA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Ensurge Micropower reported solid returns over the last few months and may actually be approaching a breakup point.

Ensurge Micropower ASA

Risk-Adjusted Performance

OK

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

Pair Trading with Ensurge Micropower and Ensurge Micropower

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

The idea behind Ensurge Micropower ASA and Ensurge Micropower ASA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.