Correlation Between Enlight Renewable and Intercure

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

By analyzing existing cross correlation between Enlight Renewable Energy and Intercure, you can compare the effects of market volatilities on Enlight Renewable and Intercure 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 Enlight Renewable with a short position of Intercure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Intercure.

Diversification Opportunities for Enlight Renewable and Intercure

0.23

Correlation Coefficient

Enlight Renewable  Intercure

Modest diversification

The 3 months correlation between Enlight and Intercure is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Intercure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercure and Enlight Renewable 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 Enlight Renewable Energy are associated (or correlated) with Intercure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercure has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and Intercure go up and down completely randomly.

Pair Corralation between Enlight Renewable and Intercure

Assuming the 90 days trading horizon Enlight Renewable is expected to generate 2.85 times less return on investment than Intercure. But when comparing it to its historical volatility, Enlight Renewable Energy is 1.91 times less risky than Intercure. It trades about 0.02 of its potential returns per unit of risk. Intercure is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  62,000  in Intercure on September 26, 2024 and sell it today you would earn a total of  1,800  from holding Intercure or generate 2.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

Enlight Renewable Energy  vs.  Intercure

Enlight Renewable Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Enlight Renewable may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intercure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intercure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators 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 Enlight Renewable and Intercure

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

The idea behind Enlight Renewable Energy and Intercure 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.