Correlation Between Enstar Group and Ageas SA/NV

Can any of the company-specific risk be diversified away by investing in both Enstar Group and Ageas SA/NV 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 Enstar Group and Ageas SA/NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enstar Group Limited and ageas SANV, you can compare the effects of market volatilities on Enstar Group and Ageas SA/NV 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 Enstar Group with a short position of Ageas SA/NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enstar Group and Ageas SA/NV.

Diversification Opportunities for Enstar Group and Ageas SA/NV

0.5

Correlation Coefficient

Enstar Group  Ageas SA/NV

Very weak diversification

The 3 months correlation between Enstar and Ageas is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Enstar Group Limited and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ageas SA/NV and Enstar Group 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 Enstar Group Limited are associated (or correlated) with Ageas SA/NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageas SA/NV has no effect on the direction of Enstar Group i.e., Enstar Group and Ageas SA/NV go up and down completely randomly.

Pair Corralation between Enstar Group and Ageas SA/NV

Given the investment horizon of 90 days Enstar Group is expected to generate 1.28 times less return on investment than Ageas SA/NV. But when comparing it to its historical volatility, Enstar Group Limited is 5.02 times less risky than Ageas SA/NV. It trades about 0.16 of its potential returns per unit of risk. ageas SANV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  5,132  in ageas SANV on November 19, 2024 and sell it today you would earn a total of  123.00  from holding ageas SANV or generate 2.4% return on investment over 90 days.

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

Enstar Group Limited  vs.  ageas SANV

Enstar Group Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enstar Group Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Enstar Group is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Ageas SA/NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Ageas SA/NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enstar Group and Ageas SA/NV

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

The idea behind Enstar Group Limited and ageas SANV 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.