Correlation Between Enel Amricas and Engie Energia
Can any of the company-specific risk be diversified away by investing in both Enel Amricas and Engie Energia 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 Engie Energia 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 Engie Energia Chile, you can compare the effects of market volatilities on Enel Amricas and Engie Energia 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 Engie Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Amricas and Engie Energia.
Diversification Opportunities for Enel Amricas and Engie Energia
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Enel and Engie is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Enel Amricas SA and Engie Energia Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie Energia Chile 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 Engie Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie Energia Chile has no effect on the direction of Enel Amricas i.e., Enel Amricas and Engie Energia go up and down completely randomly.
Pair Corralation between Enel Amricas and Engie Energia
Assuming the 90 days trading horizon Enel Amricas SA is expected to under-perform the Engie Energia. But the stock apears to be less risky and, when comparing its historical volatility, Enel Amricas SA is 1.28 times less risky than Engie Energia. The stock trades about 0.0 of its potential returns per unit of risk. The Engie Energia Chile is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 87,470 in Engie Energia Chile on September 20, 2024 and sell it today you would earn a total of 240.00 from holding Engie Energia Chile or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Amricas SA vs. Engie Energia Chile
Performance |
| Timeline |
| Enel Amricas SA |
| Engie Energia Chile |
Enel Amricas and Engie Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Amricas and Engie Energia
The main advantage of trading using opposite Enel Amricas and Engie Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Amricas position performs unexpectedly, Engie Energia 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 Engie Energia will offset losses from the drop in Engie Energia's long position.| Enel Amricas vs. Enel Chile SA | Enel Amricas vs. Empresas Copec SA | Enel Amricas vs. Banco Santander Chile | Enel Amricas vs. Falabella |
| Engie Energia vs. Colbun | Engie Energia vs. Enel Chile SA | Engie Energia vs. CAP SA | Engie Energia vs. Enel Amricas 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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