Correlation Between Movie Games and Enea SA

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

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

Diversification Opportunities for Movie Games and Enea SA

0.64

Correlation Coefficient

Movie Games  Enea SA

Poor diversification

The 3 months correlation between Movie and Enea is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea SA and Movie Games 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 Movie Games SA are associated (or correlated) with Enea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea SA has no effect on the direction of Movie Games i.e., Movie Games and Enea SA go up and down completely randomly.

Pair Corralation between Movie Games and Enea SA

Assuming the 90 days trading horizon Movie Games is expected to generate 3.63 times less return on investment than Enea SA. In addition to that, Movie Games is 2.06 times more volatile than Enea SA. It trades about 0.03 of its total potential returns per unit of risk. Enea SA is currently generating about 0.24 per unit of volatility. If you would invest  1,270  in Enea SA on December 21, 2024 and sell it today you would earn a total of  247.00  from holding Enea SA or generate 19.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Movie Games SA  vs.  Enea SA

Movie Games SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Movie Games SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Movie Games is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Enea SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enea SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Enea SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Movie Games and Enea SA

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

The idea behind Movie Games SA and Enea 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.