Correlation Between Coca Cola and Enel Generacin
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By analyzing existing cross correlation between Coca Cola Embonor SA and Enel Generacin Chile, you can compare the effects of market volatilities on Coca Cola and Enel Generacin 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 Coca Cola with a short position of Enel Generacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Enel Generacin.
Diversification Opportunities for Coca Cola and Enel Generacin
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coca and Enel is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola Embonor SA and Enel Generacin Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacin Chile and Coca Cola 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 Coca Cola Embonor SA are associated (or correlated) with Enel Generacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacin Chile has no effect on the direction of Coca Cola i.e., Coca Cola and Enel Generacin go up and down completely randomly.
Pair Corralation between Coca Cola and Enel Generacin
Assuming the 90 days trading horizon Coca Cola is expected to generate 6.86 times less return on investment than Enel Generacin. In addition to that, Coca Cola is 1.11 times more volatile than Enel Generacin Chile. It trades about 0.02 of its total potential returns per unit of risk. Enel Generacin Chile is currently generating about 0.18 per unit of volatility. If you would invest 13,895 in Enel Generacin Chile on August 30, 2024 and sell it today you would earn a total of 23,512 from holding Enel Generacin Chile or generate 169.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Coca Cola Embonor SA vs. Enel Generacin Chile
Performance |
| Timeline |
| Coca Cola Embonor |
| Enel Generacin Chile |
Coca Cola and Enel Generacin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Enel Generacin
The main advantage of trading using opposite Coca Cola and Enel Generacin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola position performs unexpectedly, Enel Generacin 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 Generacin will offset losses from the drop in Enel Generacin's long position.The idea behind Coca Cola Embonor SA and Enel Generacin Chile pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enel Generacin vs. Energia Latina SA | Enel Generacin vs. Administradora Americana de | Enel Generacin vs. Embotelladora Andina SA | Enel Generacin vs. Salfacorp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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