Correlation Between Hawaiian Electric and Enel Chile
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric and Enel Chile 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 Hawaiian Electric and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and Enel Chile SA, you can compare the effects of market volatilities on Hawaiian Electric and Enel Chile 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 Hawaiian Electric with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Enel Chile.
Diversification Opportunities for Hawaiian Electric and Enel Chile
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hawaiian and Enel is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Enel Chile SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Chile SA and Hawaiian Electric 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 Hawaiian Electric Industries are associated (or correlated) with Enel Chile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Chile SA has no effect on the direction of Hawaiian Electric i.e., Hawaiian Electric and Enel Chile go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Enel Chile
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to under-perform the Enel Chile. In addition to that, Hawaiian Electric is 1.54 times more volatile than Enel Chile SA. It trades about -0.07 of its total potential returns per unit of risk. Enel Chile SA is currently generating about 0.12 per unit of volatility. If you would invest 273.00 in Enel Chile SA on November 1, 2024 and sell it today you would earn a total of 31.00 from holding Enel Chile SA or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Enel Chile SA
Performance |
| Timeline |
| Hawaiian Electric |
| Enel Chile SA |
Hawaiian Electric and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Enel Chile
The main advantage of trading using opposite Hawaiian Electric and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric position performs unexpectedly, Enel Chile 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 Enel Chile will offset losses from the drop in Enel Chile's long position.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
| Enel Chile vs. Centrais Eltricas Brasileiras | Enel Chile vs. Korea Electric Power | Enel Chile vs. Central Puerto SA | Enel Chile vs. CMS Energy |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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