Correlation Between Enel Chile and Georgia Power
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Georgia Power 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 Georgia Power 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 Georgia Power Co, you can compare the effects of market volatilities on Enel Chile and Georgia Power 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 Georgia Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Georgia Power.
Diversification Opportunities for Enel Chile and Georgia Power
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enel and Georgia is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Georgia Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Georgia Power 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 Georgia Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Georgia Power has no effect on the direction of Enel Chile i.e., Enel Chile and Georgia Power go up and down completely randomly.
Pair Corralation between Enel Chile and Georgia Power
Given the investment horizon of 90 days Enel Chile SA is expected to generate 1.01 times more return on investment than Georgia Power. However, Enel Chile is 1.01 times more volatile than Georgia Power Co. It trades about 0.23 of its potential returns per unit of risk. Georgia Power Co is currently generating about 0.17 per unit of risk. If you would invest 286.00 in Enel Chile SA on November 3, 2024 and sell it today you would earn a total of 18.00 from holding Enel Chile SA or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Enel Chile SA vs. Georgia Power Co
Performance |
| Timeline |
| Enel Chile SA |
| Georgia Power |
Enel Chile and Georgia Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Georgia Power
The main advantage of trading using opposite Enel Chile and Georgia Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Georgia Power 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 Georgia Power will offset losses from the drop in Georgia Power'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 |
| Georgia Power vs. Southern Co | Georgia Power vs. Entergy Arkansas LLC | Georgia Power vs. DTE Energy Co | Georgia Power vs. Entergy New Orleans |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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