Correlation Between Empresa Distribuidora and Enel Generacion
Can any of the company-specific risk be diversified away by investing in both Empresa Distribuidora and Enel Generacion 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 Empresa Distribuidora and Enel Generacion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empresa Distribuidora Electrica and Enel Generacion Costanera, you can compare the effects of market volatilities on Empresa Distribuidora and Enel Generacion 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 Empresa Distribuidora with a short position of Enel Generacion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and Enel Generacion.
Diversification Opportunities for Empresa Distribuidora and Enel Generacion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empresa and Enel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora Electric and Enel Generacion Costanera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacion Costanera and Empresa Distribuidora 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 Empresa Distribuidora Electrica are associated (or correlated) with Enel Generacion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacion Costanera has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and Enel Generacion go up and down completely randomly.
Pair Corralation between Empresa Distribuidora and Enel Generacion
If you would invest 44,550 in Enel Generacion Costanera on October 20, 2024 and sell it today you would earn a total of 10,450 from holding Enel Generacion Costanera or generate 23.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Empresa Distribuidora Electric vs. Enel Generacion Costanera
Performance |
| Timeline |
| Empresa Distribuidora |
| Enel Generacion Costanera |
Empresa Distribuidora and Enel Generacion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empresa Distribuidora and Enel Generacion
The main advantage of trading using opposite Empresa Distribuidora and Enel Generacion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Distribuidora position performs unexpectedly, Enel Generacion 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 Generacion will offset losses from the drop in Enel Generacion's long position.| Empresa Distribuidora vs. Central Puerto SA | Empresa Distribuidora vs. Enel Generacion Costanera | Empresa Distribuidora vs. Edesa Holding SA |
| Enel Generacion vs. Central Puerto SA | Enel Generacion vs. Edesa Holding SA | Enel Generacion vs. Empresa Distribuidora Electrica |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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