Correlation Between Banco Santander and Enel Generacin
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By analyzing existing cross correlation between Banco Santander Chile and Enel Generacin Chile, you can compare the effects of market volatilities on Banco Santander 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 Banco Santander with a short position of Enel Generacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Enel Generacin.
Diversification Opportunities for Banco Santander and Enel Generacin
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Banco and Enel is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Chile 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 Banco Santander 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 Banco Santander Chile 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 Banco Santander i.e., Banco Santander and Enel Generacin go up and down completely randomly.
Pair Corralation between Banco Santander and Enel Generacin
Assuming the 90 days trading horizon Banco Santander is expected to generate 2.11 times less return on investment than Enel Generacin. In addition to that, Banco Santander is 1.05 times more volatile than Enel Generacin Chile. It trades about 0.08 of its total potential returns per unit of risk. Enel Generacin Chile is currently generating about 0.18 per unit of volatility. If you would invest 13,895 in Enel Generacin Chile on August 30, 2024 and sell it today you would earn a total of 23,512 from holding Enel Generacin Chile or generate 169.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Banco Santander Chile vs. Enel Generacin Chile
Performance |
| Timeline |
| Banco Santander Chile |
| Enel Generacin Chile |
Banco Santander and Enel Generacin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Enel Generacin
The main advantage of trading using opposite Banco Santander and Enel Generacin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander 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.| Banco Santander vs. Banco de Chile | Banco Santander vs. Banco de Credito | Banco Santander vs. Cencosud | Banco Santander vs. Falabella |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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