Correlation Between Enel Amricas and Empresas CMPC
Can any of the company-specific risk be diversified away by investing in both Enel Amricas and Empresas CMPC 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 Enel Amricas and Empresas CMPC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enel Amricas SA and Empresas CMPC, you can compare the effects of market volatilities on Enel Amricas and Empresas CMPC 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 Enel Amricas with a short position of Empresas CMPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Amricas and Empresas CMPC.
Diversification Opportunities for Enel Amricas and Empresas CMPC
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enel and Empresas is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Enel Amricas SA and Empresas CMPC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresas CMPC and Enel Amricas 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 Enel Amricas SA are associated (or correlated) with Empresas CMPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresas CMPC has no effect on the direction of Enel Amricas i.e., Enel Amricas and Empresas CMPC go up and down completely randomly.
Pair Corralation between Enel Amricas and Empresas CMPC
Assuming the 90 days trading horizon Enel Amricas SA is expected to under-perform the Empresas CMPC. But the stock apears to be less risky and, when comparing its historical volatility, Enel Amricas SA is 1.26 times less risky than Empresas CMPC. The stock trades about -0.03 of its potential returns per unit of risk. The Empresas CMPC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 146,948 in Empresas CMPC on August 28, 2024 and sell it today you would earn a total of 6,052 from holding Empresas CMPC or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Amricas SA vs. Empresas CMPC
Performance |
| Timeline |
| Enel Amricas SA |
| Empresas CMPC |
Enel Amricas and Empresas CMPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Amricas and Empresas CMPC
The main advantage of trading using opposite Enel Amricas and Empresas CMPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Amricas position performs unexpectedly, Empresas CMPC 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 Empresas CMPC will offset losses from the drop in Empresas CMPC's long position.| Enel Amricas vs. Empresas Copec SA | Enel Amricas vs. Banco Santander Chile | Enel Amricas vs. Falabella | Enel Amricas vs. Cencosud |
| Empresas CMPC vs. Empresas Copec SA | Empresas CMPC vs. Cencosud | Empresas CMPC vs. Falabella | Empresas CMPC vs. Sociedad Qumica y |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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