Correlation Between Enel Generacion and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both Enel Generacion and Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI, you can compare the effects of market volatilities on Enel Generacion and Ledesma SAAI 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 Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacion and Ledesma SAAI.
Diversification Opportunities for Enel Generacion and Ledesma SAAI
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enel and Ledesma is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacion Costanera and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI 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 Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of Enel Generacion i.e., Enel Generacion and Ledesma SAAI go up and down completely randomly.
Pair Corralation between Enel Generacion and Ledesma SAAI
Assuming the 90 days trading horizon Enel Generacion Costanera is expected to generate 1.96 times more return on investment than Ledesma SAAI. However, Enel Generacion is 1.96 times more volatile than Ledesma SAAI. It trades about 0.26 of its potential returns per unit of risk. Ledesma SAAI is currently generating about 0.02 per unit of risk. 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Enel Generacion Costanera vs. Ledesma SAAI
Performance |
| Timeline |
| Enel Generacion Costanera |
| Ledesma SAAI |
Enel Generacion and Ledesma SAAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacion and Ledesma SAAI
The main advantage of trading using opposite Enel Generacion and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacion position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.| Enel Generacion vs. Boldt SA | Enel Generacion vs. Agrometal SAI | Enel Generacion vs. United States Steel | Enel Generacion vs. Capex SA |
| Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. Agrometal SAI | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |