Correlation Between Enel SpA and EnBW Energie
Can any of the company-specific risk be diversified away by investing in both Enel SpA and EnBW Energie 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 SpA and EnBW Energie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enel SpA and EnBW Energie Baden Wrttemberg, you can compare the effects of market volatilities on Enel SpA and EnBW Energie 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 SpA with a short position of EnBW Energie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel SpA and EnBW Energie.
Diversification Opportunities for Enel SpA and EnBW Energie
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enel and EnBW is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Enel SpA and EnBW Energie Baden Wrttemberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnBW Energie Baden and Enel SpA 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 SpA are associated (or correlated) with EnBW Energie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnBW Energie Baden has no effect on the direction of Enel SpA i.e., Enel SpA and EnBW Energie go up and down completely randomly.
Pair Corralation between Enel SpA and EnBW Energie
Assuming the 90 days trading horizon Enel SpA is expected to generate 0.48 times more return on investment than EnBW Energie. However, Enel SpA is 2.09 times less risky than EnBW Energie. It trades about 0.06 of its potential returns per unit of risk. EnBW Energie Baden Wrttemberg is currently generating about -0.03 per unit of risk. If you would invest 554.00 in Enel SpA on September 4, 2024 and sell it today you would earn a total of 130.00 from holding Enel SpA or generate 23.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.33% |
| Values | Daily Returns |
Enel SpA vs. EnBW Energie Baden Wrttemberg
Performance |
| Timeline |
| Enel SpA |
| EnBW Energie Baden |
Enel SpA and EnBW Energie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel SpA and EnBW Energie
The main advantage of trading using opposite Enel SpA and EnBW Energie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel SpA position performs unexpectedly, EnBW Energie 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 EnBW Energie will offset losses from the drop in EnBW Energie's long position.| Enel SpA vs. GAMESTOP | Enel SpA vs. G III Apparel Group | Enel SpA vs. FUTURE GAMING GRP | Enel SpA vs. Hochschild Mining plc |
| EnBW Energie vs. PRECISION DRILLING P | EnBW Energie vs. Salesforce | EnBW Energie vs. Canon Marketing Japan | EnBW Energie vs. CARSALESCOM |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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