Correlation Between ENDESA ADR/ and ALLFUNDS GROUP
Can any of the company-specific risk be diversified away by investing in both ENDESA ADR/ and ALLFUNDS GROUP 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 ADR/ and ALLFUNDS GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENDESA ADR 12 and ALLFUNDS GROUP EO 0025, you can compare the effects of market volatilities on ENDESA ADR/ and ALLFUNDS GROUP 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 ADR/ with a short position of ALLFUNDS GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENDESA ADR/ and ALLFUNDS GROUP.
Diversification Opportunities for ENDESA ADR/ and ALLFUNDS GROUP
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENDESA and ALLFUNDS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ENDESA ADR 12 and ALLFUNDS GROUP EO 0025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLFUNDS GROUP EO and ENDESA ADR/ 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 ADR 12 are associated (or correlated) with ALLFUNDS GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLFUNDS GROUP EO has no effect on the direction of ENDESA ADR/ i.e., ENDESA ADR/ and ALLFUNDS GROUP go up and down completely randomly.
Pair Corralation between ENDESA ADR/ and ALLFUNDS GROUP
Assuming the 90 days trading horizon ENDESA ADR 12 is expected to generate 1.09 times more return on investment than ALLFUNDS GROUP. However, ENDESA ADR/ is 1.09 times more volatile than ALLFUNDS GROUP EO 0025. It trades about 0.25 of its potential returns per unit of risk. ALLFUNDS GROUP EO 0025 is currently generating about -0.23 per unit of risk. If you would invest 945.00 in ENDESA ADR 12 on October 24, 2024 and sell it today you would earn a total of 65.00 from holding ENDESA ADR 12 or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENDESA ADR 12 vs. ALLFUNDS GROUP EO 0025
Performance |
| Timeline |
| ENDESA ADR 12 |
| ALLFUNDS GROUP EO |
ENDESA ADR/ and ALLFUNDS GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENDESA ADR/ and ALLFUNDS GROUP
The main advantage of trading using opposite ENDESA ADR/ and ALLFUNDS GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENDESA ADR/ position performs unexpectedly, ALLFUNDS GROUP 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 ALLFUNDS GROUP will offset losses from the drop in ALLFUNDS GROUP's long position.| ENDESA ADR/ vs. China Eastern Airlines | ENDESA ADR/ vs. PKSHA TECHNOLOGY INC | ENDESA ADR/ vs. AECOM TECHNOLOGY | ENDESA ADR/ vs. Easy Software AG |
| ALLFUNDS GROUP vs. Chengdu PUTIAN Telecommunications | ALLFUNDS GROUP vs. SOCKET MOBILE NEW | ALLFUNDS GROUP vs. Spirent Communications plc | ALLFUNDS GROUP vs. FIH MOBILE |
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 CEOs Directory module to screen CEOs from public companies around the world.
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