Correlation Between Prodways Group and Enertime SAS

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

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

Diversification Opportunities for Prodways Group and Enertime SAS

0.0

Correlation Coefficient

Prodways Group  Enertime SAS

Pay attention - limited upside

The 3 months correlation between Prodways and Enertime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prodways Group SA and Enertime SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enertime SAS and Prodways Group 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 Prodways Group SA are associated (or correlated) with Enertime SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enertime SAS has no effect on the direction of Prodways Group i.e., Prodways Group and Enertime SAS go up and down completely randomly.

Pair Corralation between Prodways Group and Enertime SAS

If you would invest  48.00  in Prodways Group SA on September 29, 2024 and sell it today you would earn a total of  6.00  from holding Prodways Group SA or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Prodways Group SA  vs.  Enertime SAS

Prodways Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prodways Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Prodways Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Enertime SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enertime SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Enertime SAS is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Prodways Group and Enertime SAS

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

The idea behind Prodways Group SA and Enertime SAS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.