Correlation Between Gestamp Automocion and ENCE Energa
Can any of the company-specific risk be diversified away by investing in both Gestamp Automocion and ENCE Energa 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 Gestamp Automocion and ENCE Energa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gestamp Automocion SA and ENCE Energa y, you can compare the effects of market volatilities on Gestamp Automocion and ENCE Energa 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 Gestamp Automocion with a short position of ENCE Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gestamp Automocion and ENCE Energa.
Diversification Opportunities for Gestamp Automocion and ENCE Energa
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gestamp and ENCE is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gestamp Automocion SA and ENCE Energa y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENCE Energa y and Gestamp Automocion 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 Gestamp Automocion SA are associated (or correlated) with ENCE Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENCE Energa y has no effect on the direction of Gestamp Automocion i.e., Gestamp Automocion and ENCE Energa go up and down completely randomly.
Pair Corralation between Gestamp Automocion and ENCE Energa
Assuming the 90 days trading horizon Gestamp Automocion is expected to generate 2.44 times less return on investment than ENCE Energa. In addition to that, Gestamp Automocion is 1.27 times more volatile than ENCE Energa y. It trades about 0.02 of its total potential returns per unit of risk. ENCE Energa y is currently generating about 0.06 per unit of volatility. If you would invest 277.00 in ENCE Energa y on December 4, 2024 and sell it today you would earn a total of 63.00 from holding ENCE Energa y or generate 22.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Gestamp Automocion SA vs. ENCE Energa y
Performance |
Timeline |
Gestamp Automocion |
ENCE Energa y |
Gestamp Automocion and ENCE Energa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gestamp Automocion and ENCE Energa
The main advantage of trading using opposite Gestamp Automocion and ENCE Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gestamp Automocion position performs unexpectedly, ENCE Energa 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 ENCE Energa will offset losses from the drop in ENCE Energa's long position.Gestamp Automocion vs. CIE Automotive SA | Gestamp Automocion vs. ENCE Energa y | Gestamp Automocion vs. Global Dominion Access | Gestamp Automocion vs. Viscofan |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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