Correlation Between Natcore Technology and Enphase Energy

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

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

Diversification Opportunities for Natcore Technology and Enphase Energy

0.0

Correlation Coefficient

Natcore Technology  Enphase Energy

Pay attention - limited upside

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

Pair Corralation between Natcore Technology and Enphase Energy

If you would invest  11,105  in Enphase Energy on January 25, 2024 and sell it today you would earn a total of  243.00  from holding Enphase Energy or generate 2.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Natcore Technology  vs.  Enphase Energy

Natcore Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natcore Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Natcore Technology is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Enphase Energy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enphase Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Enphase Energy may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Natcore Technology and Enphase Energy

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

The idea behind Natcore Technology and Enphase Energy 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 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.