Correlation Between ALLFUNDS GROUP and ENDESA ADR/
Can any of the company-specific risk be diversified away by investing in both ALLFUNDS GROUP and ENDESA ADR/ 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 ALLFUNDS GROUP and ENDESA ADR/ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALLFUNDS GROUP EO 0025 and ENDESA ADR 12, you can compare the effects of market volatilities on ALLFUNDS GROUP and ENDESA ADR/ 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 ALLFUNDS GROUP with a short position of ENDESA ADR/. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLFUNDS GROUP and ENDESA ADR/.
Diversification Opportunities for ALLFUNDS GROUP and ENDESA ADR/
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALLFUNDS and ENDESA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ALLFUNDS GROUP EO 0025 and ENDESA ADR 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENDESA ADR 12 and ALLFUNDS GROUP 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 ALLFUNDS GROUP EO 0025 are associated (or correlated) with ENDESA ADR/. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENDESA ADR 12 has no effect on the direction of ALLFUNDS GROUP i.e., ALLFUNDS GROUP and ENDESA ADR/ go up and down completely randomly.
Pair Corralation between ALLFUNDS GROUP and ENDESA ADR/
Assuming the 90 days horizon ALLFUNDS GROUP EO 0025 is expected to under-perform the ENDESA ADR/. But the stock apears to be less risky and, when comparing its historical volatility, ALLFUNDS GROUP EO 0025 is 1.1 times less risky than ENDESA ADR/. The stock trades about -0.54 of its potential returns per unit of risk. The ENDESA ADR 12 is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,010 in ENDESA ADR 12 on October 9, 2024 and sell it today you would lose (30.00) from holding ENDESA ADR 12 or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALLFUNDS GROUP EO 0025 vs. ENDESA ADR 12
Performance |
| Timeline |
| ALLFUNDS GROUP EO |
| ENDESA ADR 12 |
ALLFUNDS GROUP and ENDESA ADR/ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALLFUNDS GROUP and ENDESA ADR/
The main advantage of trading using opposite ALLFUNDS GROUP and ENDESA ADR/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLFUNDS GROUP position performs unexpectedly, ENDESA ADR/ 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 ENDESA ADR/ will offset losses from the drop in ENDESA ADR/'s long position.| ALLFUNDS GROUP vs. Ares Management Corp | ALLFUNDS GROUP vs. Superior Plus Corp | ALLFUNDS GROUP vs. NMI Holdings | ALLFUNDS GROUP vs. SIVERS SEMICONDUCTORS AB |
| ENDESA ADR/ vs. Cogent Communications Holdings | ENDESA ADR/ vs. Casio Computer CoLtd | ENDESA ADR/ vs. GMO Internet | ENDESA ADR/ vs. IMPERIAL TOBACCO |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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