Correlation Between Enersys and Naked Brand

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

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

Diversification Opportunities for Enersys and Naked Brand

0.0

Correlation Coefficient

Enersys  Naked Brand

Pay attention - limited upside

The 3 months correlation between Enersys and Naked is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enersys and Naked Brand Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naked Brand Group and Enersys 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 Enersys are associated (or correlated) with Naked Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naked Brand Group has no effect on the direction of Enersys i.e., Enersys and Naked Brand go up and down completely randomly.

Pair Corralation between Enersys and Naked Brand

If you would invest  9,124  in Enersys on February 4, 2024 and sell it today you would earn a total of  204.00  from holding Enersys or generate 2.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Enersys  vs.  Naked Brand Group

Enersys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enersys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enersys is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Naked Brand Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Enersys and Naked Brand

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

The idea behind Enersys and Naked Brand Group 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.