Correlation Between SWISS WATER and Enel Chile
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and Enel Chile 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 SWISS WATER and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and Enel Chile SA, you can compare the effects of market volatilities on SWISS WATER and Enel Chile 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 SWISS WATER with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and Enel Chile.
Diversification Opportunities for SWISS WATER and Enel Chile
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SWISS and Enel is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and Enel Chile SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Chile SA and SWISS WATER 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 SWISS WATER DECAFFCOFFEE are associated (or correlated) with Enel Chile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Chile SA has no effect on the direction of SWISS WATER i.e., SWISS WATER and Enel Chile go up and down completely randomly.
Pair Corralation between SWISS WATER and Enel Chile
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the Enel Chile. In addition to that, SWISS WATER is 1.38 times more volatile than Enel Chile SA. It trades about -0.04 of its total potential returns per unit of risk. Enel Chile SA is currently generating about 0.19 per unit of volatility. If you would invest 254.00 in Enel Chile SA on September 15, 2024 and sell it today you would earn a total of 16.00 from holding Enel Chile SA or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. Enel Chile SA
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| Enel Chile SA |
SWISS WATER and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and Enel Chile
The main advantage of trading using opposite SWISS WATER and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, Enel Chile 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 Enel Chile will offset losses from the drop in Enel Chile's long position.| SWISS WATER vs. Hormel Foods | SWISS WATER vs. Superior Plus Corp | SWISS WATER vs. SIVERS SEMICONDUCTORS AB | SWISS WATER vs. NorAm Drilling AS |
| Enel Chile vs. Salesforce | Enel Chile vs. CDL INVESTMENT | Enel Chile vs. GungHo Online Entertainment | Enel Chile vs. SWISS WATER DECAFFCOFFEE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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