Correlation Between Waga Energy and Berkem Group

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

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

Diversification Opportunities for Waga Energy and Berkem Group

0.25

Correlation Coefficient

Waga Energy  Berkem Group

Modest diversification

The 3 months correlation between Waga and Berkem is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Waga Energy SA and Berkem Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkem Group SA and Waga 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 Waga Energy SA are associated (or correlated) with Berkem Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkem Group SA has no effect on the direction of Waga Energy i.e., Waga Energy and Berkem Group go up and down completely randomly.

Pair Corralation between Waga Energy and Berkem Group

If you would invest  310.00  in Berkem Group SA on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Berkem Group SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	63.16%
Values	Daily Returns

Waga Energy SA  vs.  Berkem Group SA

Waga Energy SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waga Energy SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Berkem Group SA

Risk-Adjusted Performance

0 of 100

Modest

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

Pair Trading with Waga Energy and Berkem Group

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

The idea behind Waga Energy SA and Berkem Group 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.