Correlation Between Embotelladora Andina and Enel Generacin
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By analyzing existing cross correlation between Embotelladora Andina SA and Enel Generacin Chile, you can compare the effects of market volatilities on Embotelladora Andina and Enel Generacin 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 Embotelladora Andina with a short position of Enel Generacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embotelladora Andina and Enel Generacin.
Diversification Opportunities for Embotelladora Andina and Enel Generacin
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Embotelladora and Enel is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Embotelladora Andina SA and Enel Generacin Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacin Chile and Embotelladora Andina 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 Embotelladora Andina SA are associated (or correlated) with Enel Generacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacin Chile has no effect on the direction of Embotelladora Andina i.e., Embotelladora Andina and Enel Generacin go up and down completely randomly.
Pair Corralation between Embotelladora Andina and Enel Generacin
Assuming the 90 days trading horizon Embotelladora Andina is expected to generate 8.2 times less return on investment than Enel Generacin. But when comparing it to its historical volatility, Embotelladora Andina SA is 1.04 times less risky than Enel Generacin. It trades about 0.05 of its potential returns per unit of risk. Enel Generacin Chile is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 38,267 in Enel Generacin Chile on November 28, 2024 and sell it today you would earn a total of 3,190 from holding Enel Generacin Chile or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embotelladora Andina SA vs. Enel Generacin Chile
Performance |
| Timeline |
| Embotelladora Andina |
| Enel Generacin Chile |
Embotelladora Andina and Enel Generacin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embotelladora Andina and Enel Generacin
The main advantage of trading using opposite Embotelladora Andina and Enel Generacin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embotelladora Andina position performs unexpectedly, Enel Generacin 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 Generacin will offset losses from the drop in Enel Generacin's long position.| Embotelladora Andina vs. LATAM Airlines Group | Embotelladora Andina vs. Multiexport Foods SA | Embotelladora Andina vs. Banco de Credito |
| Enel Generacin vs. Banco de Credito | Enel Generacin vs. Multiexport Foods SA | Enel Generacin vs. LATAM Airlines Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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