Correlation Between Enel Generacion and Sociedad Comercial
Can any of the company-specific risk be diversified away by investing in both Enel Generacion and Sociedad Comercial 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 Sociedad Comercial 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 Sociedad Comercial del, you can compare the effects of market volatilities on Enel Generacion and Sociedad Comercial 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 Sociedad Comercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacion and Sociedad Comercial.
Diversification Opportunities for Enel Generacion and Sociedad Comercial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enel and Sociedad is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacion Costanera and Sociedad Comercial del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Comercial del 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 Sociedad Comercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Comercial del has no effect on the direction of Enel Generacion i.e., Enel Generacion and Sociedad Comercial go up and down completely randomly.
Pair Corralation between Enel Generacion and Sociedad Comercial
Assuming the 90 days trading horizon Enel Generacion Costanera is expected to generate 1.07 times more return on investment than Sociedad Comercial. However, Enel Generacion is 1.07 times more volatile than Sociedad Comercial del. It trades about 0.31 of its potential returns per unit of risk. Sociedad Comercial del is currently generating about -0.11 per unit of risk. If you would invest 44,550 in Enel Generacion Costanera on October 20, 2024 and sell it today you would earn a total of 10,450 from holding Enel Generacion Costanera or generate 23.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Enel Generacion Costanera vs. Sociedad Comercial del
Performance |
| Timeline |
| Enel Generacion Costanera |
| Sociedad Comercial del |
Enel Generacion and Sociedad Comercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacion and Sociedad Comercial
The main advantage of trading using opposite Enel Generacion and Sociedad Comercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacion position performs unexpectedly, Sociedad Comercial 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 Sociedad Comercial will offset losses from the drop in Sociedad Comercial's long position.| Enel Generacion vs. Agrometal SAI | Enel Generacion vs. Telecom Argentina | Enel Generacion vs. Compania de Transporte | Enel Generacion vs. Harmony Gold Mining |
| Sociedad Comercial vs. Carlos Casado | Sociedad Comercial vs. Garovaglio y Zorraquin | Sociedad Comercial vs. Walmart |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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