Correlation Between RESMINING UNSPADR10 and ENGIE ADR/1

Can any of the company-specific risk be diversified away by investing in both RESMINING UNSPADR10 and ENGIE ADR/1 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 RESMINING UNSPADR10 and ENGIE ADR/1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RESMINING UNSPADR10 and ENGIE ADR1 EO, you can compare the effects of market volatilities on RESMINING UNSPADR10 and ENGIE ADR/1 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 RESMINING UNSPADR10 with a short position of ENGIE ADR/1. Check out your portfolio center. Please also check ongoing floating volatility patterns of RESMINING UNSPADR10 and ENGIE ADR/1.

Diversification Opportunities for RESMINING UNSPADR10 and ENGIE ADR/1

0.88

Correlation Coefficient

RESMINING UNSPADR10  ENGIE ADR/1

Very poor diversification

The 3 months correlation between RESMINING and ENGIE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding RESMINING UNSPADR10 and ENGIE ADR1 EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGIE ADR1 EO and RESMINING UNSPADR10 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 RESMINING UNSPADR10 are associated (or correlated) with ENGIE ADR/1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGIE ADR1 EO has no effect on the direction of RESMINING UNSPADR10 i.e., RESMINING UNSPADR10 and ENGIE ADR/1 go up and down completely randomly.

Pair Corralation between RESMINING UNSPADR10 and ENGIE ADR/1

Assuming the 90 days trading horizon RESMINING UNSPADR10 is expected to generate 2.64 times more return on investment than ENGIE ADR/1. However, RESMINING UNSPADR10 is 2.64 times more volatile than ENGIE ADR1 EO. It trades about 0.19 of its potential returns per unit of risk. ENGIE ADR1 EO is currently generating about 0.13 per unit of risk. If you would invest  230.00  in RESMINING UNSPADR10 on April 23, 2025 and sell it today you would earn a total of  118.00  from holding RESMINING UNSPADR10 or generate 51.3% return on investment over 90 days.

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

RESMINING UNSPADR10  vs.  ENGIE ADR1 EO

RESMINING UNSPADR10

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RESMINING UNSPADR10 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, RESMINING UNSPADR10 reported solid returns over the last few months and may actually be approaching a breakup point.

ENGIE ADR1 EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ENGIE ADR1 EO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, ENGIE ADR/1 may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with RESMINING UNSPADR10 and ENGIE ADR/1

The main advantage of trading using opposite RESMINING UNSPADR10 and ENGIE ADR/1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RESMINING UNSPADR10 position performs unexpectedly, ENGIE ADR/1 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 ENGIE ADR/1 will offset losses from the drop in ENGIE ADR/1's long position.

The idea behind RESMINING UNSPADR10 and ENGIE ADR1 EO 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.