Correlation Between SPORTING and Entergy

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Can any of the company-specific risk be diversified away by investing in both SPORTING and Entergy 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 SPORTING and Entergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Entergy, you can compare the effects of market volatilities on SPORTING and Entergy 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 SPORTING with a short position of Entergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Entergy.

Diversification Opportunities for SPORTING and Entergy

0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between SPORTING and Entergy is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and Entergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy and SPORTING 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 SPORTING are associated (or correlated) with Entergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy has no effect on the direction of SPORTING i.e., SPORTING and Entergy go up and down completely randomly.

Pair Corralation between SPORTING and Entergy

Assuming the 90 days trading horizon SPORTING is expected to under-perform the Entergy. But the stock apears to be less risky and, when comparing its historical volatility, SPORTING is 1.52 times less risky than Entergy. The stock trades about -0.18 of its potential returns per unit of risk. The Entergy is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  7,300  in Entergy on September 25, 2024 and sell it today you would lose (150.00) from holding Entergy or give up 2.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SPORTING  vs.  Entergy

 Performance 
       Timeline  
SPORTING 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SPORTING are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, SPORTING is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Entergy 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Entergy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Entergy reported solid returns over the last few months and may actually be approaching a breakup point.

SPORTING and Entergy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPORTING and Entergy

The main advantage of trading using opposite SPORTING and Entergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING position performs unexpectedly, Entergy 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 Entergy will offset losses from the drop in Entergy's long position.
The idea behind SPORTING and Entergy 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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