Correlation Between Enerkon Solar and SinglePoint

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

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

Diversification Opportunities for Enerkon Solar and SinglePoint

0.81

Correlation Coefficient

Enerkon Solar  SinglePoint

Very poor diversification

The 3 months correlation between Enerkon and SinglePoint is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enerkon Solar International and SinglePoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SinglePoint and Enerkon Solar 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 Enerkon Solar International are associated (or correlated) with SinglePoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SinglePoint has no effect on the direction of Enerkon Solar i.e., Enerkon Solar and SinglePoint go up and down completely randomly.

Pair Corralation between Enerkon Solar and SinglePoint

Given the investment horizon of 90 days Enerkon Solar International is expected to generate 2.82 times more return on investment than SinglePoint. However, Enerkon Solar is 2.82 times more volatile than SinglePoint. It trades about 0.1 of its potential returns per unit of risk. SinglePoint is currently generating about 0.0 per unit of risk. If you would invest  1.00  in Enerkon Solar International on September 13, 2024 and sell it today you would lose (0.97) from holding Enerkon Solar International or give up 97.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	87.3%
Values	Daily Returns

Enerkon Solar International  vs.  SinglePoint

Enerkon Solar Intern

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enerkon Solar International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Enerkon Solar exhibited solid returns over the last few months and may actually be approaching a breakup point.

SinglePoint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SinglePoint has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SinglePoint is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Enerkon Solar and SinglePoint

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

The idea behind Enerkon Solar International and SinglePoint 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.