Correlation Between Enel Chile and Centrais Electricas
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Centrais Electricas 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 Centrais Electricas 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 Centrais Electricas Brasileiras, you can compare the effects of market volatilities on Enel Chile and Centrais Electricas 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 Centrais Electricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Centrais Electricas.
Diversification Opportunities for Enel Chile and Centrais Electricas
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enel and Centrais is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Centrais Electricas Brasileira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Electricas 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 Centrais Electricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Electricas has no effect on the direction of Enel Chile i.e., Enel Chile and Centrais Electricas go up and down completely randomly.
Pair Corralation between Enel Chile and Centrais Electricas
Given the investment horizon of 90 days Enel Chile SA is expected to generate 1.0 times more return on investment than Centrais Electricas. However, Enel Chile SA is 1.0 times less risky than Centrais Electricas. It trades about 0.06 of its potential returns per unit of risk. Centrais Electricas Brasileiras is currently generating about -0.01 per unit of risk. If you would invest 184.00 in Enel Chile SA on October 25, 2024 and sell it today you would earn a total of 114.00 from holding Enel Chile SA or generate 61.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Chile SA vs. Centrais Electricas Brasileira
Performance |
| Timeline |
| Enel Chile SA |
| Centrais Electricas |
Enel Chile and Centrais Electricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Centrais Electricas
The main advantage of trading using opposite Enel Chile and Centrais Electricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Centrais Electricas 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 Centrais Electricas will offset losses from the drop in Centrais Electricas' 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 |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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