Correlation Between Enlight Renewable and Utilities Portfolio

Can any of the company-specific risk be diversified away by investing in both Enlight Renewable and Utilities Portfolio 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 Utilities Portfolio 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 Utilities Portfolio Utilities, you can compare the effects of market volatilities on Enlight Renewable and Utilities Portfolio 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 Utilities Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Utilities Portfolio.

Diversification Opportunities for Enlight Renewable and Utilities Portfolio

0.37

Correlation Coefficient

Enlight Renewable  Utilities Portfolio

Weak diversification

The 3 months correlation between Enlight and Utilities is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Utilities Portfolio Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Portfolio 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 Utilities Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Portfolio has no effect on the direction of Enlight Renewable i.e., Enlight Renewable and Utilities Portfolio go up and down completely randomly.

Pair Corralation between Enlight Renewable and Utilities Portfolio

Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 3.46 times more return on investment than Utilities Portfolio. However, Enlight Renewable is 3.46 times more volatile than Utilities Portfolio Utilities. It trades about 0.25 of its potential returns per unit of risk. Utilities Portfolio Utilities is currently generating about 0.17 per unit of risk. If you would invest  1,626  in Enlight Renewable Energy on May 3, 2025 and sell it today you would earn a total of  837.00  from holding Enlight Renewable Energy or generate 51.48% return on investment over 90 days.

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

Enlight Renewable Energy  vs.  Utilities Portfolio Utilities

Enlight Renewable Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enlight Renewable Energy are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Enlight Renewable unveiled solid returns over the last few months and may actually be approaching a breakup point.

Utilities Portfolio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Utilities Portfolio Utilities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Utilities Portfolio may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Enlight Renewable and Utilities Portfolio

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

The idea behind Enlight Renewable Energy and Utilities Portfolio Utilities 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.