Correlation Between Enlight Renewable and Ellomay Capital

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Can any of the company-specific risk be diversified away by investing in both Enlight Renewable and Ellomay Capital 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 Enlight Renewable and Ellomay Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Renewable Energy and Ellomay Capital, you can compare the effects of market volatilities on Enlight Renewable and Ellomay Capital 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 Enlight Renewable with a short position of Ellomay Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Ellomay Capital.

Diversification Opportunities for Enlight Renewable and Ellomay Capital

0.81
  Correlation Coefficient

Very poor diversification

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

Pair Corralation between Enlight Renewable and Ellomay Capital

Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 0.89 times more return on investment than Ellomay Capital. However, Enlight Renewable Energy is 1.13 times less risky than Ellomay Capital. It trades about 0.22 of its potential returns per unit of risk. Ellomay Capital is currently generating about 0.12 per unit of risk. If you would invest  1,702  in Enlight Renewable Energy on May 7, 2025 and sell it today you would earn a total of  724.00  from holding Enlight Renewable Energy or generate 42.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Enlight Renewable Energy  vs.  Ellomay Capital

 Performance 
       Timeline  
Enlight Renewable Energy 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Enlight Renewable unveiled solid returns over the last few months and may actually be approaching a breakup point.
Ellomay Capital 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ellomay Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Ellomay Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Enlight Renewable and Ellomay Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enlight Renewable and Ellomay Capital

The main advantage of trading using opposite Enlight Renewable and Ellomay Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable position performs unexpectedly, Ellomay Capital 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 Ellomay Capital will offset losses from the drop in Ellomay Capital's long position.
The idea behind Enlight Renewable Energy and Ellomay Capital 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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