Correlation Between Enerkon Solar and Clear Blue

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

By analyzing existing cross correlation between Enerkon Solar International and Clear Blue Technologies, you can compare the effects of market volatilities on Enerkon Solar and Clear Blue 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 Enerkon Solar with a short position of Clear Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerkon Solar and Clear Blue.

Diversification Opportunities for Enerkon Solar and Clear Blue

0.72

Correlation Coefficient

Enerkon Solar  Clear Blue

Poor diversification

The 3 months correlation between Enerkon and Clear is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Enerkon Solar International and Clear Blue Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Blue Technologies and Enerkon Solar 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 Enerkon Solar International are associated (or correlated) with Clear Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Blue Technologies has no effect on the direction of Enerkon Solar i.e., Enerkon Solar and Clear Blue go up and down completely randomly.

Pair Corralation between Enerkon Solar and Clear Blue

Given the investment horizon of 90 days Enerkon Solar International is expected to generate 3.9 times more return on investment than Clear Blue. However, Enerkon Solar is 3.9 times more volatile than Clear Blue Technologies. It trades about 0.09 of its potential returns per unit of risk. Clear Blue Technologies is currently generating about -0.03 per unit of risk. If you would invest  1.00  in Enerkon Solar International on September 4, 2024 and sell it today you would lose (0.98) from holding Enerkon Solar International or give up 98.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Enerkon Solar International  vs.  Clear Blue Technologies

Enerkon Solar Intern

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enerkon Solar International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Enerkon Solar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Clear Blue Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Blue Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Enerkon Solar and Clear Blue

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

The idea behind Enerkon Solar International and Clear Blue Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.