Correlation Between SaltX Technology and Enersize

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

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

Diversification Opportunities for SaltX Technology and Enersize

-0.4

Correlation Coefficient

SaltX Technology  Enersize

Very good diversification

The 3 months correlation between SaltX and Enersize is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SaltX Technology Holding and Enersize Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersize Oy and SaltX Technology 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 SaltX Technology Holding are associated (or correlated) with Enersize. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersize Oy has no effect on the direction of SaltX Technology i.e., SaltX Technology and Enersize go up and down completely randomly.

Pair Corralation between SaltX Technology and Enersize

Assuming the 90 days trading horizon SaltX Technology is expected to generate 4.67 times less return on investment than Enersize. But when comparing it to its historical volatility, SaltX Technology Holding is 5.46 times less risky than Enersize. It trades about 0.15 of its potential returns per unit of risk. Enersize Oy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.52  in Enersize Oy on December 26, 2024 and sell it today you would lose (0.12) from holding Enersize Oy or give up 23.08% of portfolio value over 90 days.

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

SaltX Technology Holding  vs.  Enersize Oy

SaltX Technology Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SaltX Technology Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, SaltX Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Enersize Oy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enersize Oy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Enersize unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SaltX Technology and Enersize

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

The idea behind SaltX Technology Holding and Enersize Oy 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.