Correlation Between ENCE Energa and Prosegur

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

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

Diversification Opportunities for ENCE Energa and Prosegur

-0.3

Correlation Coefficient

ENCE Energa  Prosegur

Very good diversification

The 3 months correlation between ENCE and Prosegur is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Prosegur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosegur and ENCE Energa 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 ENCE Energa y are associated (or correlated) with Prosegur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosegur has no effect on the direction of ENCE Energa i.e., ENCE Energa and Prosegur go up and down completely randomly.

Pair Corralation between ENCE Energa and Prosegur

Assuming the 90 days trading horizon ENCE Energa y is expected to under-perform the Prosegur. But the stock apears to be less risky and, when comparing its historical volatility, ENCE Energa y is 1.33 times less risky than Prosegur. The stock trades about -0.03 of its potential returns per unit of risk. The Prosegur is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  219.00  in Prosegur on April 22, 2025 and sell it today you would earn a total of  84.00  from holding Prosegur or generate 38.36% return on investment over 90 days.

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

ENCE Energa y  vs.  Prosegur

ENCE Energa y

Risk-Adjusted Performance

Very Weak

Over the last 90 days ENCE Energa y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, ENCE Energa is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Prosegur

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prosegur are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Prosegur exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ENCE Energa and Prosegur

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

The idea behind ENCE Energa y and Prosegur 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.