Correlation Between Miko NV and Cenergy Holdings

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

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

Diversification Opportunities for Miko NV and Cenergy Holdings

-0.44

Correlation Coefficient

Miko NV  Cenergy Holdings

Very good diversification

The 3 months correlation between Miko and Cenergy is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Miko NV and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and Miko NV 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 Miko NV are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of Miko NV i.e., Miko NV and Cenergy Holdings go up and down completely randomly.

Pair Corralation between Miko NV and Cenergy Holdings

Assuming the 90 days trading horizon Miko NV is expected to generate 1.4 times less return on investment than Cenergy Holdings. But when comparing it to its historical volatility, Miko NV is 1.09 times less risky than Cenergy Holdings. It trades about 0.22 of its potential returns per unit of risk. Cenergy Holdings SA is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  876.00  in Cenergy Holdings SA on October 9, 2024 and sell it today you would earn a total of  83.00  from holding Cenergy Holdings SA or generate 9.47% return on investment over 90 days.

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

Miko NV  vs.  Cenergy Holdings SA

Miko NV

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miko NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Miko NV may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cenergy Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cenergy Holdings SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Cenergy Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Miko NV and Cenergy Holdings

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

The idea behind Miko NV and Cenergy Holdings 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.