Correlation Between Centrais Electricas and Enel Chile
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and Enel Chile 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 Centrais Electricas and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and Enel Chile SA, you can compare the effects of market volatilities on Centrais Electricas and Enel Chile 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 Centrais Electricas with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Enel Chile.
Diversification Opportunities for Centrais Electricas and Enel Chile
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrais and Enel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Enel Chile SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Chile SA and Centrais Electricas 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 Centrais Electricas Brasileiras are associated (or correlated) with Enel Chile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Chile SA has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and Enel Chile go up and down completely randomly.
Pair Corralation between Centrais Electricas and Enel Chile
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to under-perform the Enel Chile. In addition to that, Centrais Electricas is 1.0 times more volatile than Enel Chile SA. It trades about -0.01 of its total potential returns per unit of risk. Enel Chile SA is currently generating about 0.06 per unit of volatility. If you would invest 184.00 in Enel Chile SA on October 25, 2024 and sell it today you would earn a total of 114.00 from holding Enel Chile SA or generate 61.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Enel Chile SA
Performance |
| Timeline |
| Centrais Electricas |
| Enel Chile SA |
Centrais Electricas and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Enel Chile
The main advantage of trading using opposite Centrais Electricas and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, Enel Chile 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 Chile will offset losses from the drop in Enel Chile's long position.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
| Enel Chile vs. Centrais Eltricas Brasileiras | Enel Chile vs. Korea Electric Power | Enel Chile vs. Central Puerto SA | Enel Chile vs. CMS Energy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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