Correlation Between Enel Chile and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Cedar Realty 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 Chile and Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enel Chile SA and Cedar Realty Trust, you can compare the effects of market volatilities on Enel Chile and Cedar Realty 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 Chile with a short position of Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Cedar Realty.
Diversification Opportunities for Enel Chile and Cedar Realty
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enel and Cedar is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust and Enel Chile 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 Chile SA are associated (or correlated) with Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of Enel Chile i.e., Enel Chile and Cedar Realty go up and down completely randomly.
Pair Corralation between Enel Chile and Cedar Realty
Given the investment horizon of 90 days Enel Chile SA is expected to generate 0.48 times more return on investment than Cedar Realty. However, Enel Chile SA is 2.08 times less risky than Cedar Realty. It trades about 0.02 of its potential returns per unit of risk. Cedar Realty Trust is currently generating about -0.09 per unit of risk. If you would invest 288.00 in Enel Chile SA on October 14, 2024 and sell it today you would earn a total of 1.00 from holding Enel Chile SA or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Chile SA vs. Cedar Realty Trust
Performance |
| Timeline |
| Enel Chile SA |
| Cedar Realty Trust |
Enel Chile and Cedar Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Cedar Realty
The main advantage of trading using opposite Enel Chile and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Cedar Realty 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 Cedar Realty will offset losses from the drop in Cedar Realty's long position.| Enel Chile vs. Centrais Eltricas Brasileiras | Enel Chile vs. Korea Electric Power | Enel Chile vs. Central Puerto SA | Enel Chile vs. CMS Energy |
| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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