Correlation Between Enel Chile and Pacific Gas
Can any of the company-specific risk be diversified away by investing in both Enel Chile and Pacific Gas 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 Pacific Gas 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 Pacific Gas and, you can compare the effects of market volatilities on Enel Chile and Pacific Gas 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 Pacific Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Chile and Pacific Gas.
Diversification Opportunities for Enel Chile and Pacific Gas
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enel and Pacific is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and Pacific Gas and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Gas 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 Pacific Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Gas has no effect on the direction of Enel Chile i.e., Enel Chile and Pacific Gas go up and down completely randomly.
Pair Corralation between Enel Chile and Pacific Gas
Given the investment horizon of 90 days Enel Chile SA is expected to generate 0.93 times more return on investment than Pacific Gas. However, Enel Chile SA is 1.07 times less risky than Pacific Gas. It trades about 0.36 of its potential returns per unit of risk. Pacific Gas and is currently generating about -0.04 per unit of risk. If you would invest 290.00 in Enel Chile SA on November 9, 2024 and sell it today you would earn a total of 31.00 from holding Enel Chile SA or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enel Chile SA vs. Pacific Gas and
Performance |
| Timeline |
| Enel Chile SA |
| Pacific Gas |
Enel Chile and Pacific Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel Chile and Pacific Gas
The main advantage of trading using opposite Enel Chile and Pacific Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Chile position performs unexpectedly, Pacific Gas 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 Pacific Gas will offset losses from the drop in Pacific Gas' 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 |
| Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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