Correlation Between Energia Latina and Compania General
Can any of the company-specific risk be diversified away by investing in both Energia Latina and Compania General 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 Energia Latina and Compania General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energia Latina SA and Compania General de, you can compare the effects of market volatilities on Energia Latina and Compania General 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 Energia Latina with a short position of Compania General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energia Latina and Compania General.
Diversification Opportunities for Energia Latina and Compania General
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energia and Compania is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Energia Latina SA and Compania General de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania General and Energia Latina 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 Energia Latina SA are associated (or correlated) with Compania General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania General has no effect on the direction of Energia Latina i.e., Energia Latina and Compania General go up and down completely randomly.
Pair Corralation between Energia Latina and Compania General
If you would invest 30,403 in Compania General de on August 31, 2024 and sell it today you would earn a total of 483.00 from holding Compania General de or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Energia Latina SA vs. Compania General de
Performance |
| Timeline |
| Energia Latina SA |
| Compania General |
Energia Latina and Compania General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energia Latina and Compania General
The main advantage of trading using opposite Energia Latina and Compania General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energia Latina position performs unexpectedly, Compania General 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 Compania General will offset losses from the drop in Compania General's long position.| Energia Latina vs. LATAM Airlines Group | Energia Latina vs. Multiexport Foods SA | Energia Latina vs. Banco de Credito |
| Compania General vs. Embotelladora Andina SA | Compania General vs. Administradora Americana de | Compania General vs. Las Condes | Compania General vs. Salfacorp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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