Correlation Between Candela Invest and Cenergy Holdings

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

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

Diversification Opportunities for Candela Invest and Cenergy Holdings

0.72

Correlation Coefficient

Candela Invest  Cenergy Holdings

Poor diversification

The 3 months correlation between Candela and Cenergy is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Candela Invest SA and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and Candela Invest 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 Candela Invest SA are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of Candela Invest i.e., Candela Invest and Cenergy Holdings go up and down completely randomly.

Pair Corralation between Candela Invest and Cenergy Holdings

Assuming the 90 days trading horizon Candela Invest SA is expected to under-perform the Cenergy Holdings. In addition to that, Candela Invest is 2.96 times more volatile than Cenergy Holdings SA. It trades about -0.14 of its total potential returns per unit of risk. Cenergy Holdings SA is currently generating about -0.06 per unit of volatility. If you would invest  990.00  in Cenergy Holdings SA on September 23, 2024 and sell it today you would lose (107.00) from holding Cenergy Holdings SA or give up 10.81% of portfolio value over 90 days.

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

Candela Invest SA  vs.  Cenergy Holdings SA

Candela Invest SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Candela Invest SA 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.

Cenergy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cenergy Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Candela Invest and Cenergy Holdings

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

The idea behind Candela Invest SA and Cenergy Holdings 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.