Correlation Between Enel Generacion and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Enel Generacion and Agrometal SAI 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 Agrometal SAI 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 Agrometal SAI, you can compare the effects of market volatilities on Enel Generacion and Agrometal SAI 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 Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacion and Agrometal SAI.
Diversification Opportunities for Enel Generacion and Agrometal SAI
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enel and Agrometal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacion Costanera and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI 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 Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Enel Generacion i.e., Enel Generacion and Agrometal SAI go up and down completely randomly.
Pair Corralation between Enel Generacion and Agrometal SAI
Assuming the 90 days trading horizon Enel Generacion is expected to generate 1.43 times less return on investment than Agrometal SAI. But when comparing it to its historical volatility, Enel Generacion Costanera is 1.4 times less risky than Agrometal SAI. It trades about 0.4 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 5,650 in Agrometal SAI on September 4, 2024 and sell it today you would earn a total of 2,190 from holding Agrometal SAI or generate 38.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Generacion Costanera vs. Agrometal SAI
Performance |
| Timeline |
| Enel Generacion Costanera |
| Agrometal SAI |
Enel Generacion and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacion and Agrometal SAI
The main advantage of trading using opposite Enel Generacion and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacion position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.The idea behind Enel Generacion Costanera and Agrometal SAI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Telecom Argentina | Agrometal SAI vs. Transportadora de Gas |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets |