Correlation Between Enel Generacion and Insumos Agroquimicos
Can any of the company-specific risk be diversified away by investing in both Enel Generacion and Insumos Agroquimicos 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 Insumos Agroquimicos 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 Insumos Agroquimicos SA, you can compare the effects of market volatilities on Enel Generacion and Insumos Agroquimicos 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 Insumos Agroquimicos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacion and Insumos Agroquimicos.
Diversification Opportunities for Enel Generacion and Insumos Agroquimicos
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enel and Insumos is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacion Costanera and Insumos Agroquimicos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insumos Agroquimicos 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 Insumos Agroquimicos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insumos Agroquimicos has no effect on the direction of Enel Generacion i.e., Enel Generacion and Insumos Agroquimicos go up and down completely randomly.
Pair Corralation between Enel Generacion and Insumos Agroquimicos
If you would invest 48,350 in Enel Generacion Costanera on November 2, 2024 and sell it today you would earn a total of 11,950 from holding Enel Generacion Costanera or generate 24.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Generacion Costanera vs. Insumos Agroquimicos SA
Performance |
| Timeline |
| Enel Generacion Costanera |
| Insumos Agroquimicos |
Enel Generacion and Insumos Agroquimicos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacion and Insumos Agroquimicos
The main advantage of trading using opposite Enel Generacion and Insumos Agroquimicos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacion position performs unexpectedly, Insumos Agroquimicos 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 Insumos Agroquimicos will offset losses from the drop in Insumos Agroquimicos' long position.| Enel Generacion vs. Boldt SA | Enel Generacion vs. Agrometal SAI | Enel Generacion vs. United States Steel | Enel Generacion vs. Capex SA |
| Insumos Agroquimicos vs. Agrometal SAI | Insumos Agroquimicos vs. Transportadora de Gas | Insumos Agroquimicos vs. Harmony Gold Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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