Correlation Between E Split and Condor Energies

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

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

Diversification Opportunities for E Split and Condor Energies

-0.25

Correlation Coefficient

E Split  Condor Energies

Very good diversification

The 3 months correlation between ENS-PA and Condor is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Condor Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Energies and E Split 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 E Split Corp are associated (or correlated) with Condor Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Energies has no effect on the direction of E Split i.e., E Split and Condor Energies go up and down completely randomly.

Pair Corralation between E Split and Condor Energies

Assuming the 90 days trading horizon E Split Corp is expected to generate 0.34 times more return on investment than Condor Energies. However, E Split Corp is 2.95 times less risky than Condor Energies. It trades about 0.1 of its potential returns per unit of risk. Condor Energies is currently generating about -0.01 per unit of risk. If you would invest  1,100  in E Split Corp on October 7, 2024 and sell it today you would earn a total of  17.00  from holding E Split Corp or generate 1.55% return on investment over 90 days.

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

E Split Corp  vs.  Condor Energies

E Split Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, E Split is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Condor Energies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Condor Energies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Condor Energies is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with E Split and Condor Energies

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

The idea behind E Split Corp and Condor Energies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.