Correlation Between PLAYWAY SA and Enea SA

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

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

Diversification Opportunities for PLAYWAY SA and Enea SA

-0.52

Correlation Coefficient

PLAYWAY SA  Enea SA

Excellent diversification

The 3 months correlation between PLAYWAY and Enea is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWAY SA and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea SA and PLAYWAY SA 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 PLAYWAY 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 PLAYWAY SA i.e., PLAYWAY SA and Enea SA go up and down completely randomly.

Pair Corralation between PLAYWAY SA and Enea SA

Assuming the 90 days trading horizon PLAYWAY SA is expected to generate 14.88 times less return on investment than Enea SA. In addition to that, PLAYWAY SA is 1.06 times more volatile than Enea SA. It trades about 0.01 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  1,291  in Enea SA on December 30, 2024 and sell it today you would earn a total of  279.00  from holding Enea SA or generate 21.61% return on investment over 90 days.

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

PLAYWAY SA  vs.  Enea SA

PLAYWAY SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYWAY SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, PLAYWAY SA 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 PLAYWAY SA and Enea SA

The main advantage of trading using opposite PLAYWAY SA and Enea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYWAY SA 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 PLAYWAY 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.