Correlation Between Enel Chile and Companhia Paranaense
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Companhia Paranaense 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 Companhia Paranaense 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 Companhia Paranaense de, you can compare the effects of market volatilities on Enel Chile and Companhia Paranaense 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 Companhia Paranaense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Companhia Paranaense.
Diversification Opportunities for Enel Chile and Companhia Paranaense
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enel and Companhia is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Companhia Paranaense de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Paranaense 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 Companhia Paranaense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Paranaense has no effect on the direction of Enel Chile i.e., Enel Chile and Companhia Paranaense go up and down completely randomly.
Pair Corralation between Enel Chile and Companhia Paranaense
Given the investment horizon of 90 days Enel Chile is expected to generate 2.67 times less return on investment than Companhia Paranaense. But when comparing it to its historical volatility, Enel Chile SA is 1.44 times less risky than Companhia Paranaense. It trades about 0.19 of its potential returns per unit of risk. Companhia Paranaense de is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 591.00 in Companhia Paranaense de on November 2, 2024 and sell it today you would earn a total of 81.00 from holding Companhia Paranaense de or generate 13.71% 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. Companhia Paranaense de
Performance |
| Timeline |
| Enel Chile SA |
| Companhia Paranaense |
Enel Chile and Companhia Paranaense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Companhia Paranaense
The main advantage of trading using opposite Enel Chile and Companhia Paranaense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Companhia Paranaense 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 Companhia Paranaense will offset losses from the drop in Companhia Paranaense'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 |
| Companhia Paranaense vs. Montauk Renewables | Companhia Paranaense vs. Energy of Minas | Companhia Paranaense vs. NorthWestern | Companhia Paranaense vs. Otter Tail |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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