Correlation Between Citigroup and Enel Chile
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Enel Chile SA, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Enel Chile.
Diversification Opportunities for Citigroup and Enel Chile
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citigroup and Enel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and Enel Chile go up and down completely randomly.
Pair Corralation between Citigroup and Enel Chile
Taking into account the 90-day investment horizon Citigroup is expected to generate 0.93 times more return on investment than Enel Chile. However, Citigroup is 1.08 times less risky than Enel Chile. It trades about 0.2 of its potential returns per unit of risk. Enel Chile SA is currently generating about 0.08 per unit of risk. If you would invest 5,683 in Citigroup on September 12, 2024 and sell it today you would earn a total of 1,513 from holding Citigroup or generate 26.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Citigroup vs. Enel Chile SA
Performance |
| Timeline |
| Citigroup |
| Enel Chile SA |
Citigroup and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Enel Chile
The main advantage of trading using opposite Citigroup and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| Enel Chile vs. Duke Energy | Enel Chile vs. WEC Energy Group | Enel Chile vs. ENDESA ADR 12 | Enel Chile vs. CMS Energy |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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