Correlation Between Enel Generacion and Apple
Can any of the company-specific risk be diversified away by investing in both Enel Generacion and Apple 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 Enel Generacion and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enel Generacion Costanera and Apple Inc DRC, you can compare the effects of market volatilities on Enel Generacion and Apple 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 Enel Generacion with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacion and Apple.
Diversification Opportunities for Enel Generacion and Apple
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enel and Apple is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacion Costanera and Apple Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc DRC and Enel Generacion 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 Enel Generacion Costanera are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc DRC has no effect on the direction of Enel Generacion i.e., Enel Generacion and Apple go up and down completely randomly.
Pair Corralation between Enel Generacion and Apple
Assuming the 90 days trading horizon Enel Generacion Costanera is expected to generate 1.79 times more return on investment than Apple. However, Enel Generacion is 1.79 times more volatile than Apple Inc DRC. It trades about 0.28 of its potential returns per unit of risk. Apple Inc DRC is currently generating about 0.44 per unit of risk. If you would invest 41,150 in Enel Generacion Costanera on September 18, 2024 and sell it today you would earn a total of 6,400 from holding Enel Generacion Costanera or generate 15.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Generacion Costanera vs. Apple Inc DRC
Performance |
| Timeline |
| Enel Generacion Costanera |
| Apple Inc DRC |
Enel Generacion and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacion and Apple
The main advantage of trading using opposite Enel Generacion and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacion position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Enel Generacion vs. Edesa Holding SA | Enel Generacion vs. Vista Energy, SAB | Enel Generacion vs. United States Steel | Enel Generacion vs. Pfizer Inc |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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