Correlation Between ENCE Energa and Inmobiliaria Colonial
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Inmobiliaria Colonial 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 ENCE Energa and Inmobiliaria Colonial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENCE Energa y and Inmobiliaria Colonial SA, you can compare the effects of market volatilities on ENCE Energa and Inmobiliaria Colonial 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 ENCE Energa with a short position of Inmobiliaria Colonial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Inmobiliaria Colonial.
Diversification Opportunities for ENCE Energa and Inmobiliaria Colonial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ENCE and Inmobiliaria is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Inmobiliaria Colonial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmobiliaria Colonial and ENCE Energa 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 ENCE Energa y are associated (or correlated) with Inmobiliaria Colonial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmobiliaria Colonial has no effect on the direction of ENCE Energa i.e., ENCE Energa and Inmobiliaria Colonial go up and down completely randomly.
Pair Corralation between ENCE Energa and Inmobiliaria Colonial
Assuming the 90 days trading horizon ENCE Energa is expected to generate 9.05 times less return on investment than Inmobiliaria Colonial. But when comparing it to its historical volatility, ENCE Energa y is 1.08 times less risky than Inmobiliaria Colonial. It trades about 0.0 of its potential returns per unit of risk. Inmobiliaria Colonial SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 495.00 in Inmobiliaria Colonial SA on August 25, 2024 and sell it today you would earn a total of 59.00 from holding Inmobiliaria Colonial SA or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Inmobiliaria Colonial SA
Performance |
| Timeline |
| ENCE Energa y |
| Inmobiliaria Colonial |
ENCE Energa and Inmobiliaria Colonial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Inmobiliaria Colonial
The main advantage of trading using opposite ENCE Energa and Inmobiliaria Colonial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Inmobiliaria Colonial 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 Inmobiliaria Colonial will offset losses from the drop in Inmobiliaria Colonial's long position.| ENCE Energa vs. ACS Actividades de | ENCE Energa vs. ArcelorMittal SA | ENCE Energa vs. Mapfre | ENCE Energa vs. Ferrovial |
| Inmobiliaria Colonial vs. Neinor Homes SLU | Inmobiliaria Colonial vs. Metrovacesa SA | Inmobiliaria Colonial vs. Atresmedia Corporacin de |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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