Correlation Between Enel Generacion and Instituto Rosenbusch
Can any of the company-specific risk be diversified away by investing in both Enel Generacion and Instituto Rosenbusch 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 Instituto Rosenbusch 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 Instituto Rosenbusch SA, you can compare the effects of market volatilities on Enel Generacion and Instituto Rosenbusch 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 Instituto Rosenbusch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacion and Instituto Rosenbusch.
Diversification Opportunities for Enel Generacion and Instituto Rosenbusch
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enel and Instituto is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacion Costanera and Instituto Rosenbusch SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instituto Rosenbusch 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 Instituto Rosenbusch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instituto Rosenbusch has no effect on the direction of Enel Generacion i.e., Enel Generacion and Instituto Rosenbusch go up and down completely randomly.
Pair Corralation between Enel Generacion and Instituto Rosenbusch
Assuming the 90 days trading horizon Enel Generacion Costanera is expected to generate 2.21 times more return on investment than Instituto Rosenbusch. However, Enel Generacion is 2.21 times more volatile than Instituto Rosenbusch SA. It trades about 0.26 of its potential returns per unit of risk. Instituto Rosenbusch SA is currently generating about -0.09 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 | 100.0% |
| Values | Daily Returns |
Enel Generacion Costanera vs. Instituto Rosenbusch SA
Performance |
| Timeline |
| Enel Generacion Costanera |
| Instituto Rosenbusch |
Enel Generacion and Instituto Rosenbusch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacion and Instituto Rosenbusch
The main advantage of trading using opposite Enel Generacion and Instituto Rosenbusch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacion position performs unexpectedly, Instituto Rosenbusch 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 Instituto Rosenbusch will offset losses from the drop in Instituto Rosenbusch's long position.| Enel Generacion vs. Boldt SA | Enel Generacion vs. Agrometal SAI | Enel Generacion vs. United States Steel | Enel Generacion vs. Capex SA |
| Instituto Rosenbusch vs. Boldt SA | Instituto Rosenbusch vs. Agrometal SAI | Instituto Rosenbusch vs. United States Steel | Instituto Rosenbusch vs. Capex SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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