Correlation Between Tubize Fin and Cenergy Holdings

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

By analyzing existing cross correlation between Tubize Fin and Cenergy Holdings SA, you can compare the effects of market volatilities on Tubize Fin and Cenergy Holdings 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 Tubize Fin with a short position of Cenergy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tubize Fin and Cenergy Holdings.

Diversification Opportunities for Tubize Fin and Cenergy Holdings

-0.35

Correlation Coefficient

Tubize Fin  Cenergy Holdings

Very good diversification

The 3 months correlation between Tubize and Cenergy is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tubize Fin and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and Tubize Fin 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 Tubize Fin are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of Tubize Fin i.e., Tubize Fin and Cenergy Holdings go up and down completely randomly.

Pair Corralation between Tubize Fin and Cenergy Holdings

Assuming the 90 days trading horizon Tubize Fin is expected to under-perform the Cenergy Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Tubize Fin is 1.28 times less risky than Cenergy Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Cenergy Holdings SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  875.00  in Cenergy Holdings SA on September 23, 2024 and sell it today you would earn a total of  8.00  from holding Cenergy Holdings SA or generate 0.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tubize Fin  vs.  Cenergy Holdings SA

Tubize Fin

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tubize Fin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Tubize Fin is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cenergy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cenergy Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tubize Fin and Cenergy Holdings

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

The idea behind Tubize Fin and Cenergy Holdings SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.