Correlation Between Viscofan and ENCE Energa

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

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

Diversification Opportunities for Viscofan and ENCE Energa

0.3

Correlation Coefficient

Viscofan  ENCE Energa

Weak diversification

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

Pair Corralation between Viscofan and ENCE Energa

Assuming the 90 days trading horizon Viscofan is expected to under-perform the ENCE Energa. But the stock apears to be less risky and, when comparing its historical volatility, Viscofan is 1.18 times less risky than ENCE Energa. The stock trades about -0.13 of its potential returns per unit of risk. The ENCE Energa y is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  297.00  in ENCE Energa y on April 24, 2025 and sell it today you would lose (9.00) from holding ENCE Energa y or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Viscofan  vs.  ENCE Energa y

Viscofan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viscofan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Viscofan and ENCE Energa

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

The idea behind Viscofan and ENCE Energa y 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.