Correlation Between Enel Chile and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Hawaiian Electric 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 Hawaiian Electric 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 Hawaiian Electric Industries, you can compare the effects of market volatilities on Enel Chile and Hawaiian Electric 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 Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Hawaiian Electric.
Diversification Opportunities for Enel Chile and Hawaiian Electric
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enel and Hawaiian is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Hawaiian Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric 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 Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of Enel Chile i.e., Enel Chile and Hawaiian Electric go up and down completely randomly.
Pair Corralation between Enel Chile and Hawaiian Electric
Given the investment horizon of 90 days Enel Chile SA is expected to generate 0.43 times more return on investment than Hawaiian Electric. However, Enel Chile SA is 2.34 times less risky than Hawaiian Electric. It trades about 0.05 of its potential returns per unit of risk. Hawaiian Electric Industries is currently generating about -0.03 per unit of risk. If you would invest 176.00 in Enel Chile SA on August 28, 2024 and sell it today you would earn a total of 95.00 from holding Enel Chile SA or generate 53.98% 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. Hawaiian Electric Industries
Performance |
| Timeline |
| Enel Chile SA |
| Hawaiian Electric |
Enel Chile and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Hawaiian Electric
The main advantage of trading using opposite Enel Chile and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Hawaiian Electric 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.| Enel Chile vs. Dominion Energy | Enel Chile vs. Consolidated Edison | Enel Chile vs. Eversource Energy | Enel Chile vs. FirstEnergy |
| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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