Correlation Between ENCE Energa and Mapfre
Can any of the company-specific risk be diversified away by investing in both ENCE Energa and Mapfre 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 Mapfre 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 Mapfre, you can compare the effects of market volatilities on ENCE Energa and Mapfre 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 Mapfre. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENCE Energa and Mapfre.
Diversification Opportunities for ENCE Energa and Mapfre
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ENCE and Mapfre is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ENCE Energa y and Mapfre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre 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 Mapfre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre has no effect on the direction of ENCE Energa i.e., ENCE Energa and Mapfre go up and down completely randomly.
Pair Corralation between ENCE Energa and Mapfre
Assuming the 90 days trading horizon ENCE Energa y is expected to generate 1.57 times more return on investment than Mapfre. However, ENCE Energa is 1.57 times more volatile than Mapfre. It trades about 0.01 of its potential returns per unit of risk. Mapfre is currently generating about -0.21 per unit of risk. If you would invest 281.00 in ENCE Energa y on August 30, 2024 and sell it today you would earn a total of 0.00 from holding ENCE Energa y or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENCE Energa y vs. Mapfre
Performance |
| Timeline |
| ENCE Energa y |
| Mapfre |
ENCE Energa and Mapfre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENCE Energa and Mapfre
The main advantage of trading using opposite ENCE Energa and Mapfre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENCE Energa position performs unexpectedly, Mapfre 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 Mapfre will offset losses from the drop in Mapfre's long position.| ENCE Energa vs. Vidrala SA | ENCE Energa vs. Grupo Catalana Occidente | ENCE Energa vs. Cia de Distribucion | ENCE Energa vs. Viscofan |
| Mapfre vs. Inhome Prime Properties | Mapfre vs. Caixabank SA | Mapfre vs. Techo Hogar SOCIMI, | Mapfre vs. Tier1 Technology SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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