Correlation Between Enags SA and Fomento De

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

By analyzing existing cross correlation between Enags SA and Fomento de Construcciones, you can compare the effects of market volatilities on Enags SA and Fomento De 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 Enags SA with a short position of Fomento De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enags SA and Fomento De.

Diversification Opportunities for Enags SA and Fomento De

0.81

Correlation Coefficient

Enags SA  Fomento De

Very poor diversification

The 3 months correlation between Enags and Fomento is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enags SA and Fomento de Construcciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento de Construcciones and Enags SA 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 Enags SA are associated (or correlated) with Fomento De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento de Construcciones has no effect on the direction of Enags SA i.e., Enags SA and Fomento De go up and down completely randomly.

Pair Corralation between Enags SA and Fomento De

Assuming the 90 days trading horizon Enags SA is expected to generate 2.17 times less return on investment than Fomento De. But when comparing it to its historical volatility, Enags SA is 1.95 times less risky than Fomento De. It trades about 0.12 of its potential returns per unit of risk. Fomento de Construcciones is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,015  in Fomento de Construcciones on April 24, 2025 and sell it today you would earn a total of  141.00  from holding Fomento de Construcciones or generate 13.89% return on investment over 90 days.

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

Enags SA  vs.  Fomento de Construcciones

Enags SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enags SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Enags SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fomento de Construcciones

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fomento de Construcciones are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Fomento De exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enags SA and Fomento De

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

The idea behind Enags SA and Fomento de Construcciones 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.