Correlation Between Endesa SA and Mapfre
Can any of the company-specific risk be diversified away by investing in both Endesa SA and Mapfre 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 Endesa SA and Mapfre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endesa SA and Mapfre, you can compare the effects of market volatilities on Endesa SA and Mapfre 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 Endesa SA with a short position of Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endesa SA and Mapfre.
Diversification Opportunities for Endesa SA and Mapfre
Very weak diversification
The 3 months correlation between Endesa and Mapfre is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Endesa SA and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre and Endesa SA 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 Endesa SA are associated (or correlated) with Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of Endesa SA i.e., Endesa SA and Mapfre go up and down completely randomly.
Pair Corralation between Endesa SA and Mapfre
Assuming the 90 days trading horizon Endesa SA is expected to generate 1.56 times less return on investment than Mapfre. But when comparing it to its historical volatility, Endesa SA is 1.03 times less risky than Mapfre. It trades about 0.13 of its potential returns per unit of risk. Mapfre is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Mapfre on August 28, 2024 and sell it today you would earn a total of 33.00 from holding Mapfre or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endesa SA vs. Mapfre
Performance |
| Timeline |
| Endesa SA |
| Mapfre |
Endesa SA and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endesa SA and Mapfre
The main advantage of trading using opposite Endesa SA and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endesa SA position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.| Endesa SA vs. Enags SA | Endesa SA vs. Mapfre | Endesa SA vs. ACS Actividades de | Endesa SA vs. Merlin Properties SOCIMI |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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