Correlation Between Energia Latina and Enjoy SA
Can any of the company-specific risk be diversified away by investing in both Energia Latina and Enjoy SA 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 Enjoy SA 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 Enjoy SA, you can compare the effects of market volatilities on Energia Latina and Enjoy SA 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 Enjoy SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energia Latina and Enjoy SA.
Diversification Opportunities for Energia Latina and Enjoy SA
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energia and Enjoy is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Energia Latina SA and Enjoy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjoy SA 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 Enjoy SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enjoy SA has no effect on the direction of Energia Latina i.e., Energia Latina and Enjoy SA go up and down completely randomly.
Pair Corralation between Energia Latina and Enjoy SA
Assuming the 90 days trading horizon Energia Latina SA is expected to generate 0.23 times more return on investment than Enjoy SA. However, Energia Latina SA is 4.29 times less risky than Enjoy SA. It trades about 0.14 of its potential returns per unit of risk. Enjoy SA is currently generating about -0.04 per unit of risk. If you would invest 75,479 in Energia Latina SA on August 26, 2024 and sell it today you would earn a total of 18,021 from holding Energia Latina SA or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 53.58% |
| Values | Daily Returns |
Energia Latina SA vs. Enjoy SA
Performance |
| Timeline |
| Energia Latina SA |
| Enjoy SA |
Energia Latina and Enjoy SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energia Latina and Enjoy SA
The main advantage of trading using opposite Energia Latina and Enjoy SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energia Latina position performs unexpectedly, Enjoy SA 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 Enjoy SA will offset losses from the drop in Enjoy SA's long position.| Energia Latina vs. Salfacorp | Energia Latina vs. Vina Concha To | Energia Latina vs. Sociedad Matriz SAAM | Energia Latina vs. Nitratos de Chile |
| Enjoy SA vs. Aguas Andinas SA | Enjoy SA vs. Parq Arauco | Enjoy SA vs. Enel Generacin Chile | Enjoy SA vs. Sociedad Matriz SAAM |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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