Correlation Between Enphase Energy and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Enphase Energy and Globalfoundries 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 Enphase Energy and Globalfoundries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and Globalfoundries, you can compare the effects of market volatilities on Enphase Energy and Globalfoundries 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 Enphase Energy with a short position of Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and Globalfoundries.
Diversification Opportunities for Enphase Energy and Globalfoundries
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enphase and Globalfoundries is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Enphase 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 Enphase Energy are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Enphase Energy i.e., Enphase Energy and Globalfoundries go up and down completely randomly.
Pair Corralation between Enphase Energy and Globalfoundries
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the Globalfoundries. In addition to that, Enphase Energy is 1.52 times more volatile than Globalfoundries. It trades about -0.04 of its total potential returns per unit of risk. Globalfoundries is currently generating about 0.0 per unit of volatility. If you would invest 5,291 in Globalfoundries on September 25, 2024 and sell it today you would lose (867.00) from holding Globalfoundries or give up 16.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Enphase Energy vs. Globalfoundries
Performance |
Timeline |
Enphase Energy |
Globalfoundries |
Enphase Energy and Globalfoundries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enphase Energy and Globalfoundries
The main advantage of trading using opposite Enphase Energy and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' long position.Enphase Energy vs. First Solar | Enphase Energy vs. Sunrun Inc | Enphase Energy vs. Canadian Solar | Enphase Energy vs. SolarEdge Technologies |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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