Correlation Between Enel Chile and Central Puerto
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Central Puerto 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 Central Puerto 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 Central Puerto SA, you can compare the effects of market volatilities on Enel Chile and Central Puerto 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 Central Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Central Puerto.
Diversification Opportunities for Enel Chile and Central Puerto
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enel and Central is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Central Puerto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Puerto SA 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 Central Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Puerto SA has no effect on the direction of Enel Chile i.e., Enel Chile and Central Puerto go up and down completely randomly.
Pair Corralation between Enel Chile and Central Puerto
Given the investment horizon of 90 days Enel Chile SA is expected to under-perform the Central Puerto. But the stock apears to be less risky and, when comparing its historical volatility, Enel Chile SA is 1.22 times less risky than Central Puerto. The stock trades about -0.11 of its potential returns per unit of risk. The Central Puerto SA is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 1,122 in Central Puerto SA on August 27, 2024 and sell it today you would earn a total of 275.00 from holding Central Puerto SA or generate 24.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Chile SA vs. Central Puerto SA
Performance |
| Timeline |
| Enel Chile SA |
| Central Puerto SA |
Enel Chile and Central Puerto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Central Puerto
The main advantage of trading using opposite Enel Chile and Central Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Central Puerto 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 Central Puerto will offset losses from the drop in Central Puerto's long position.| Enel Chile vs. Dominion Energy | Enel Chile vs. Consolidated Edison | Enel Chile vs. Eversource Energy | Enel Chile vs. FirstEnergy |
| Central Puerto vs. Korea Electric Power | Central Puerto vs. Centrais Electricas Brasileiras | Central Puerto vs. MGE Energy | Central Puerto vs. IDACORP |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |