Correlation Between EnLink and Socket Mobile

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

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

Diversification Opportunities for EnLink and Socket Mobile

-0.23

Correlation Coefficient

EnLink  Socket Mobile

Very good diversification

The 3 months correlation between EnLink and Socket is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding EnLink Midstream Partners and Socket Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socket Mobile and EnLink 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 EnLink Midstream Partners are associated (or correlated) with Socket Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socket Mobile has no effect on the direction of EnLink i.e., EnLink and Socket Mobile go up and down completely randomly.

Pair Corralation between EnLink and Socket Mobile

Assuming the 90 days trading horizon EnLink Midstream Partners is expected to generate 0.04 times more return on investment than Socket Mobile. However, EnLink Midstream Partners is 25.44 times less risky than Socket Mobile. It trades about 0.02 of its potential returns per unit of risk. Socket Mobile is currently generating about -0.03 per unit of risk. If you would invest  9,989  in EnLink Midstream Partners on December 1, 2024 and sell it today you would earn a total of  17.00  from holding EnLink Midstream Partners or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

EnLink Midstream Partners  vs.  Socket Mobile

EnLink Midstream Partners

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EnLink Midstream Partners are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, EnLink is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Socket Mobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Socket Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with EnLink and Socket Mobile

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

The idea behind EnLink Midstream Partners and Socket Mobile 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.