Correlation Between Gencell and Enlight Renewable

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

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

Diversification Opportunities for Gencell and Enlight Renewable

0.02

Correlation Coefficient

Gencell  Enlight Renewable

Significant diversification

The 3 months correlation between Gencell and Enlight is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gencell and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy and Gencell 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 Gencell are associated (or correlated) with Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Gencell i.e., Gencell and Enlight Renewable go up and down completely randomly.

Pair Corralation between Gencell and Enlight Renewable

Assuming the 90 days trading horizon Gencell is expected to under-perform the Enlight Renewable. In addition to that, Gencell is 1.71 times more volatile than Enlight Renewable Energy. It trades about -0.07 of its total potential returns per unit of risk. Enlight Renewable Energy is currently generating about 0.0 per unit of volatility. If you would invest  677,700  in Enlight Renewable Energy on September 26, 2024 and sell it today you would lose (48,400) from holding Enlight Renewable Energy or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.74%
Values	Daily Returns

Gencell  vs.  Enlight Renewable Energy

Gencell

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gencell are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gencell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Gencell and Enlight Renewable

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

The idea behind Gencell and Enlight Renewable Energy 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.