Correlation Between ENN ENERGY and Apple

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

By analyzing existing cross correlation between ENN ENERGY HLD and Apple Inc, you can compare the effects of market volatilities on ENN ENERGY and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN ENERGY and Apple.

Diversification Opportunities for ENN ENERGY and Apple

0.67

Correlation Coefficient

ENN ENERGY  Apple

Poor diversification

The 3 months correlation between ENN and Apple is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ENN ENERGY HLD and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 HLD are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of ENN ENERGY i.e., ENN ENERGY and Apple go up and down completely randomly.

Pair Corralation between ENN ENERGY and Apple

Assuming the 90 days trading horizon ENN ENERGY HLD is expected to generate 2.95 times more return on investment than Apple. However, ENN ENERGY is 2.95 times more volatile than Apple Inc. It trades about 0.09 of its potential returns per unit of risk. Apple Inc is currently generating about -0.01 per unit of risk. If you would invest  680.00  in ENN ENERGY HLD on October 11, 2024 and sell it today you would earn a total of  25.00  from holding ENN ENERGY HLD or generate 3.68% return on investment over 90 days.

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

ENN ENERGY HLD  vs.  Apple Inc

ENN ENERGY HLD

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENN ENERGY HLD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ENN ENERGY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ENN ENERGY and Apple

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

The idea behind ENN ENERGY HLD and Apple Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.