Correlation Between Enel Generacin and Aguas Andinas
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By analyzing existing cross correlation between Enel Generacin Chile and Aguas Andinas SA, you can compare the effects of market volatilities on Enel Generacin and Aguas Andinas 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 Generacin with a short position of Aguas Andinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacin and Aguas Andinas.
Diversification Opportunities for Enel Generacin and Aguas Andinas
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enel and Aguas is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacin Chile and Aguas Andinas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguas Andinas SA and Enel Generacin 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 Generacin Chile are associated (or correlated) with Aguas Andinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguas Andinas SA has no effect on the direction of Enel Generacin i.e., Enel Generacin and Aguas Andinas go up and down completely randomly.
Pair Corralation between Enel Generacin and Aguas Andinas
Assuming the 90 days trading horizon Enel Generacin is expected to generate 3.17 times less return on investment than Aguas Andinas. But when comparing it to its historical volatility, Enel Generacin Chile is 1.37 times less risky than Aguas Andinas. It trades about 0.13 of its potential returns per unit of risk. Aguas Andinas SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 29,272 in Aguas Andinas SA on November 2, 2024 and sell it today you would earn a total of 2,078 from holding Aguas Andinas SA or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Generacin Chile vs. Aguas Andinas SA
Performance |
| Timeline |
| Enel Generacin Chile |
| Aguas Andinas SA |
Enel Generacin and Aguas Andinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Generacin and Aguas Andinas
The main advantage of trading using opposite Enel Generacin and Aguas Andinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacin position performs unexpectedly, Aguas Andinas 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 Aguas Andinas will offset losses from the drop in Aguas Andinas' long position.| Enel Generacin vs. Enel Amricas SA | Enel Generacin vs. Enel Chile SA | Enel Generacin vs. Aguas Andinas SA | Enel Generacin vs. Parq Arauco |
| Aguas Andinas vs. Multiexport Foods SA | Aguas Andinas vs. LATAM Airlines Group | Aguas Andinas vs. Banco de Credito |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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