Correlation Between Empire Global and Endesa SA
Can any of the company-specific risk be diversified away by investing in both Empire Global and Endesa 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 Empire Global and Endesa SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Global Gaming and Endesa SA, you can compare the effects of market volatilities on Empire Global and Endesa 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 Empire Global with a short position of Endesa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Global and Endesa SA.
Diversification Opportunities for Empire Global and Endesa SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Empire and Endesa is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Empire Global Gaming and Endesa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endesa SA and Empire Global 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 Empire Global Gaming are associated (or correlated) with Endesa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endesa SA has no effect on the direction of Empire Global i.e., Empire Global and Endesa SA go up and down completely randomly.
Pair Corralation between Empire Global and Endesa SA
Given the investment horizon of 90 days Empire Global Gaming is expected to under-perform the Endesa SA. In addition to that, Empire Global is 60.57 times more volatile than Endesa SA. It trades about -0.22 of its total potential returns per unit of risk. Endesa SA is currently generating about -0.22 per unit of volatility. If you would invest 2,120 in Endesa SA on September 2, 2024 and sell it today you would lose (35.00) from holding Endesa SA or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Global Gaming vs. Endesa SA
Performance |
| Timeline |
| Empire Global Gaming |
| Endesa SA |
Empire Global and Endesa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Global and Endesa SA
The main advantage of trading using opposite Empire Global and Endesa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Global position performs unexpectedly, Endesa 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 Endesa SA will offset losses from the drop in Endesa SA's long position.| Empire Global vs. Churchill Downs Incorporated | Empire Global vs. Gan | Empire Global vs. Rush Street Interactive | Empire Global vs. Lottery, Common Stock |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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