Correlation Between Entech SE and SA Catana

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

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

Diversification Opportunities for Entech SE and SA Catana

-0.05

Correlation Coefficient

Entech SE  SA Catana

Good diversification

The 3 months correlation between Entech and CATG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Entech SE SAS and SA Catana Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SA Catana Group and Entech SE 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 Entech SE SAS are associated (or correlated) with SA Catana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SA Catana Group has no effect on the direction of Entech SE i.e., Entech SE and SA Catana go up and down completely randomly.

Pair Corralation between Entech SE and SA Catana

Assuming the 90 days trading horizon Entech SE SAS is expected to under-perform the SA Catana. In addition to that, Entech SE is 1.59 times more volatile than SA Catana Group. It trades about -0.06 of its total potential returns per unit of risk. SA Catana Group is currently generating about 0.01 per unit of volatility. If you would invest  495.00  in SA Catana Group on September 12, 2024 and sell it today you would earn a total of  0.00  from holding SA Catana Group or generate 0.0% return on investment over 90 days.

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

Entech SE SAS  vs.  SA Catana Group

Entech SE SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entech SE SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

SA Catana Group

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days SA Catana Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SA Catana is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Entech SE and SA Catana

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

The idea behind Entech SE SAS and SA Catana Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.