Correlation Between Esso SAF and Enertime SAS

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

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

Diversification Opportunities for Esso SAF and Enertime SAS

0.0

Correlation Coefficient

Esso SAF  Enertime SAS

Pay attention - limited upside

The 3 months correlation between Esso and Enertime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Esso SAF and Enertime SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enertime SAS and Esso SAF 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 Esso SAF are associated (or correlated) with Enertime SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enertime SAS has no effect on the direction of Esso SAF i.e., Esso SAF and Enertime SAS go up and down completely randomly.

Pair Corralation between Esso SAF and Enertime SAS

If you would invest  10,240  in Esso SAF on September 8, 2024 and sell it today you would earn a total of  200.00  from holding Esso SAF or generate 1.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	52.17%
Values	Daily Returns

Esso SAF  vs.  Enertime SAS

Esso SAF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esso SAF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Enertime SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enertime SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Enertime SAS 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 Esso SAF and Enertime SAS

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

The idea behind Esso SAF and Enertime SAS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.