Correlation Between Cenergy Holdings and Jensen

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

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

Diversification Opportunities for Cenergy Holdings and Jensen

-0.35

Correlation Coefficient

Cenergy Holdings  Jensen

Very good diversification

The 3 months correlation between Cenergy and Jensen is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group and Cenergy Holdings 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 Cenergy Holdings SA are associated (or correlated) with Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and Jensen go up and down completely randomly.

Pair Corralation between Cenergy Holdings and Jensen

Assuming the 90 days trading horizon Cenergy Holdings SA is expected to under-perform the Jensen. In addition to that, Cenergy Holdings is 1.32 times more volatile than Jensen Group. It trades about -0.05 of its total potential returns per unit of risk. Jensen Group is currently generating about 0.01 per unit of volatility. If you would invest  4,150  in Jensen Group on September 24, 2024 and sell it today you would earn a total of  10.00  from holding Jensen Group or generate 0.24% return on investment over 90 days.

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

Cenergy Holdings SA  vs.  Jensen Group

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.

Jensen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jensen Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Jensen is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cenergy Holdings and Jensen

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

The idea behind Cenergy Holdings SA and Jensen 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 CEOs Directory module to screen CEOs from public companies around the world.