Correlation Between Susglobal Energy and Enviri

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

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

Diversification Opportunities for Susglobal Energy and Enviri

-0.53

Correlation Coefficient

Susglobal Energy  Enviri

Excellent diversification

The 3 months correlation between Susglobal and Enviri is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Susglobal Energy Corp and Enviri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enviri and Susglobal Energy 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 Susglobal Energy Corp are associated (or correlated) with Enviri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enviri has no effect on the direction of Susglobal Energy i.e., Susglobal Energy and Enviri go up and down completely randomly.

Pair Corralation between Susglobal Energy and Enviri

If you would invest  2.40  in Susglobal Energy Corp on September 12, 2024 and sell it today you would lose (0.91) from holding Susglobal Energy Corp or give up 37.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Susglobal Energy Corp  vs.  Enviri

Susglobal Energy Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Susglobal Energy Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Susglobal Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Enviri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enviri has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Enviri is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Susglobal Energy and Enviri

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

The idea behind Susglobal Energy Corp and Enviri 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.