Correlation Between Central Puerto and Enel Generacion
Can any of the company-specific risk be diversified away by investing in both Central Puerto and Enel Generacion 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 Central Puerto and Enel Generacion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Puerto SA and Enel Generacion Costanera, you can compare the effects of market volatilities on Central Puerto and Enel Generacion 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 Central Puerto with a short position of Enel Generacion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Puerto and Enel Generacion.
Diversification Opportunities for Central Puerto and Enel Generacion
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and Enel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Central Puerto SA and Enel Generacion Costanera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacion Costanera and Central Puerto 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 Central Puerto SA are associated (or correlated) with Enel Generacion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacion Costanera has no effect on the direction of Central Puerto i.e., Central Puerto and Enel Generacion go up and down completely randomly.
Pair Corralation between Central Puerto and Enel Generacion
Assuming the 90 days trading horizon Central Puerto SA is expected to under-perform the Enel Generacion. But the stock apears to be less risky and, when comparing its historical volatility, Central Puerto SA is 1.23 times less risky than Enel Generacion. The stock trades about -0.03 of its potential returns per unit of risk. The Enel Generacion Costanera is currently generating about 0.31 of returns per unit of risk over similar time horizon. 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 | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Central Puerto SA vs. Enel Generacion Costanera
Performance |
| Timeline |
| Central Puerto SA |
| Enel Generacion Costanera |
Central Puerto and Enel Generacion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Puerto and Enel Generacion
The main advantage of trading using opposite Central Puerto and Enel Generacion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto position performs unexpectedly, Enel Generacion 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 Enel Generacion will offset losses from the drop in Enel Generacion's long position.| Central Puerto vs. Enel Generacion Costanera | Central Puerto vs. Edesa Holding SA | Central Puerto vs. Empresa Distribuidora Electrica |
| Enel Generacion vs. Agrometal SAI | Enel Generacion vs. Telecom Argentina | Enel Generacion vs. Compania de Transporte | Enel Generacion 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |