Correlation Between Enphase Energy, and Grupo Posadas

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

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

Diversification Opportunities for Enphase Energy, and Grupo Posadas

0.63

Correlation Coefficient

Enphase Energy,  Grupo Posadas

Poor diversification

The 3 months correlation between Enphase and Grupo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy, and Grupo Posadas SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Posadas SAB and Enphase Energy, 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 Enphase Energy, are associated (or correlated) with Grupo Posadas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Posadas SAB has no effect on the direction of Enphase Energy, i.e., Enphase Energy, and Grupo Posadas go up and down completely randomly.

Pair Corralation between Enphase Energy, and Grupo Posadas

Assuming the 90 days trading horizon Enphase Energy, is expected to under-perform the Grupo Posadas. In addition to that, Enphase Energy, is 3.55 times more volatile than Grupo Posadas SAB. It trades about -0.08 of its total potential returns per unit of risk. Grupo Posadas SAB is currently generating about -0.2 per unit of volatility. If you would invest  2,729  in Grupo Posadas SAB on October 24, 2024 and sell it today you would lose (329.00) from holding Grupo Posadas SAB or give up 12.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Enphase Energy,  vs.  Grupo Posadas SAB

Enphase Energy,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enphase Energy, 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 fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Grupo Posadas SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Posadas SAB 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 fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Enphase Energy, and Grupo Posadas

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

The idea behind Enphase Energy, and Grupo Posadas SAB 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.