Correlation Between Estrella Immunopharma and Eneos Holdings

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

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

Diversification Opportunities for Estrella Immunopharma and Eneos Holdings

-0.4

Correlation Coefficient

Estrella Immunopharma  Eneos Holdings

Very good diversification

The 3 months correlation between Estrella and Eneos is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Estrella Immunopharma and Eneos Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneos Holdings ADR and Estrella Immunopharma 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 Estrella Immunopharma are associated (or correlated) with Eneos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneos Holdings ADR has no effect on the direction of Estrella Immunopharma i.e., Estrella Immunopharma and Eneos Holdings go up and down completely randomly.

Pair Corralation between Estrella Immunopharma and Eneos Holdings

Assuming the 90 days horizon Estrella Immunopharma is expected to generate 6.31 times more return on investment than Eneos Holdings. However, Estrella Immunopharma is 6.31 times more volatile than Eneos Holdings ADR. It trades about 0.15 of its potential returns per unit of risk. Eneos Holdings ADR is currently generating about 0.03 per unit of risk. If you would invest  9.00  in Estrella Immunopharma on September 4, 2024 and sell it today you would earn a total of  0.10  from holding Estrella Immunopharma or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	31.25%
Values	Daily Returns

Estrella Immunopharma  vs.  Eneos Holdings ADR

Estrella Immunopharma

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Estrella Immunopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Eneos Holdings ADR

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eneos Holdings ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Eneos Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Estrella Immunopharma and Eneos Holdings

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

The idea behind Estrella Immunopharma and Eneos Holdings ADR 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..