Correlation Between Endesa SA and US Wind
Can any of the company-specific risk be diversified away by investing in both Endesa SA and US Wind 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 US Wind 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 US Wind Farming, you can compare the effects of market volatilities on Endesa SA and US Wind 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 US Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endesa SA and US Wind.
Diversification Opportunities for Endesa SA and US Wind
Pay attention - limited upside
The 3 months correlation between Endesa and USWF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Endesa SA ADR and US Wind Farming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Wind Farming 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 US Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Wind Farming has no effect on the direction of Endesa SA i.e., Endesa SA and US Wind go up and down completely randomly.
Pair Corralation between Endesa SA and US Wind
Assuming the 90 days horizon Endesa SA ADR is expected to generate 0.54 times more return on investment than US Wind. However, Endesa SA ADR is 1.87 times less risky than US Wind. It trades about 0.03 of its potential returns per unit of risk. US Wind Farming is currently generating about -0.05 per unit of risk. If you would invest 995.00 in Endesa SA ADR on August 31, 2024 and sell it today you would earn a total of 103.00 from holding Endesa SA ADR or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Endesa SA ADR vs. US Wind Farming
Performance |
| Timeline |
| Endesa SA ADR |
| US Wind Farming |
Endesa SA and US Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endesa SA and US Wind
The main advantage of trading using opposite Endesa SA and US Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endesa SA position performs unexpectedly, US Wind 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 US Wind will offset losses from the drop in US Wind's long position.| Endesa SA vs. Equatorial Energia SA | Endesa SA vs. Centrais Electricas Brasileiras | Endesa SA vs. Entergy Texas | Endesa SA vs. IDACORP |
| US Wind vs. Southern Company | US Wind vs. Duke Energy | US Wind vs. Duke Energy | US Wind vs. National Grid PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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