Correlation Between ENN Energy and CTP NV

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

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

Diversification Opportunities for ENN Energy and CTP NV

-0.64

Correlation Coefficient

ENN Energy  CTP NV

Excellent diversification

The 3 months correlation between ENN and CTP is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO and ENN 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 ENN Energy Holdings are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV EO has no effect on the direction of ENN Energy i.e., ENN Energy and CTP NV go up and down completely randomly.

Pair Corralation between ENN Energy and CTP NV

Assuming the 90 days trading horizon ENN Energy is expected to generate 4.24 times less return on investment than CTP NV. In addition to that, ENN Energy is 1.43 times more volatile than CTP NV EO. It trades about 0.02 of its total potential returns per unit of risk. CTP NV EO is currently generating about 0.1 per unit of volatility. If you would invest  1,512  in CTP NV EO on December 18, 2024 and sell it today you would earn a total of  134.00  from holding CTP NV EO or generate 8.86% return on investment over 90 days.

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

ENN Energy Holdings  vs.  CTP NV EO

ENN Energy Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENN Energy Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, ENN Energy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CTP NV EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTP NV EO are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CTP NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ENN Energy and CTP NV

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

The idea behind ENN Energy Holdings and CTP NV EO 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..