Correlation Between Eneraqua Technologies and Panasonic Corp

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

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

Diversification Opportunities for Eneraqua Technologies and Panasonic Corp

0.24

Correlation Coefficient

Eneraqua Technologies  Panasonic Corp

Modest diversification

The 3 months correlation between Eneraqua and Panasonic is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eneraqua Technologies PLC and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp and Eneraqua Technologies 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 Eneraqua Technologies PLC are associated (or correlated) with Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of Eneraqua Technologies i.e., Eneraqua Technologies and Panasonic Corp go up and down completely randomly.

Pair Corralation between Eneraqua Technologies and Panasonic Corp

Assuming the 90 days trading horizon Eneraqua Technologies PLC is expected to under-perform the Panasonic Corp. But the stock apears to be less risky and, when comparing its historical volatility, Eneraqua Technologies PLC is 1.35 times less risky than Panasonic Corp. The stock trades about -0.11 of its potential returns per unit of risk. The Panasonic Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  160,200  in Panasonic Corp on December 24, 2024 and sell it today you would earn a total of  28,600  from holding Panasonic Corp or generate 17.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	53.23%
Values	Daily Returns

Eneraqua Technologies PLC  vs.  Panasonic Corp

Eneraqua Technologies PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eneraqua Technologies PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Panasonic Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Panasonic Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Panasonic Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eneraqua Technologies and Panasonic Corp

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

The idea behind Eneraqua Technologies PLC and Panasonic Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.