Correlation Between Jefferies Financial and Energisa

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

By analyzing existing cross correlation between Jefferies Financial Group and Energisa SA, you can compare the effects of market volatilities on Jefferies Financial and Energisa 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 Jefferies Financial with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Energisa.

Diversification Opportunities for Jefferies Financial and Energisa

-0.59

Correlation Coefficient

Jefferies Financial  Energisa

Excellent diversification

The 3 months correlation between Jefferies and Energisa is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and Jefferies Financial 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 Jefferies Financial Group are associated (or correlated) with Energisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa SA has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Energisa go up and down completely randomly.

Pair Corralation between Jefferies Financial and Energisa

Assuming the 90 days trading horizon Jefferies Financial Group is expected to under-perform the Energisa. In addition to that, Jefferies Financial is 1.33 times more volatile than Energisa SA. It trades about -0.21 of its total potential returns per unit of risk. Energisa SA is currently generating about 0.09 per unit of volatility. If you would invest  3,719  in Energisa SA on December 26, 2024 and sell it today you would earn a total of  372.00  from holding Energisa SA or generate 10.0% return on investment over 90 days.

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

Jefferies Financial Group  vs.  Energisa SA

Jefferies Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jefferies Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Energisa SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energisa SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Energisa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Jefferies Financial and Energisa

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

The idea behind Jefferies Financial Group and Energisa SA 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.