Correlation Between Endesa SA and MGE Energy
Can any of the company-specific risk be diversified away by investing in both Endesa SA and MGE Energy 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 MGE Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endesa SA ADR and MGE Energy, you can compare the effects of market volatilities on Endesa SA and MGE Energy 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 MGE Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endesa SA and MGE Energy.
Diversification Opportunities for Endesa SA and MGE Energy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Endesa and MGE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Endesa SA ADR and MGE Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGE Energy 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 ADR are associated (or correlated) with MGE Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGE Energy has no effect on the direction of Endesa SA i.e., Endesa SA and MGE Energy go up and down completely randomly.
Pair Corralation between Endesa SA and MGE Energy
Assuming the 90 days horizon Endesa SA ADR is expected to generate 0.65 times more return on investment than MGE Energy. However, Endesa SA ADR is 1.54 times less risky than MGE Energy. It trades about 0.14 of its potential returns per unit of risk. MGE Energy is currently generating about -0.24 per unit of risk. If you would invest 1,077 in Endesa SA ADR on October 26, 2024 and sell it today you would earn a total of 36.00 from holding Endesa SA ADR or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Endesa SA ADR vs. MGE Energy
Performance |
| Timeline |
| Endesa SA ADR |
| MGE Energy |
Endesa SA and MGE Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endesa SA and MGE Energy
The main advantage of trading using opposite Endesa SA and MGE Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endesa SA position performs unexpectedly, MGE Energy 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 MGE Energy will offset losses from the drop in MGE Energy's long position.| Endesa SA vs. Equatorial Energia SA | Endesa SA vs. Centrais Electricas Brasileiras | Endesa SA vs. Entergy Texas | Endesa SA vs. IDACORP |
| MGE Energy vs. CMS Energy | MGE Energy vs. Ameren Corp | MGE Energy vs. Pinnacle West Capital | MGE Energy vs. Evergy, |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |