Correlation Between ENN Energy and MEDIPAL HOLDINGS

Can any of the company-specific risk be diversified away by investing in both ENN Energy and MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS P, you can compare the effects of market volatilities on ENN Energy and MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and MEDIPAL HOLDINGS.

Diversification Opportunities for ENN Energy and MEDIPAL HOLDINGS

-0.14

Correlation Coefficient

ENN Energy  MEDIPAL HOLDINGS

Good diversification

The 3 months correlation between ENN and MEDIPAL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and MEDIPAL HOLDINGS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPAL HOLDINGS P 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 MEDIPAL HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPAL HOLDINGS P has no effect on the direction of ENN Energy i.e., ENN Energy and MEDIPAL HOLDINGS go up and down completely randomly.

Pair Corralation between ENN Energy and MEDIPAL HOLDINGS

If you would invest  1,200  in MEDIPAL HOLDINGS P on October 11, 2024 and sell it today you would earn a total of  240.00  from holding MEDIPAL HOLDINGS P or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

ENN Energy Holdings  vs.  MEDIPAL HOLDINGS P

ENN Energy Holdings

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days ENN Energy Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak technical indicators, ENN Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

MEDIPAL HOLDINGS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIPAL HOLDINGS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ENN Energy and MEDIPAL HOLDINGS

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

The idea behind ENN Energy Holdings and MEDIPAL HOLDINGS P 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.