Correlation Between Insumos Agroquimicos and Enel Generacion
Can any of the company-specific risk be diversified away by investing in both Insumos Agroquimicos and Enel Generacion 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 Insumos Agroquimicos and Enel Generacion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insumos Agroquimicos SA and Enel Generacion Costanera, you can compare the effects of market volatilities on Insumos Agroquimicos and Enel Generacion 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 Insumos Agroquimicos with a short position of Enel Generacion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insumos Agroquimicos and Enel Generacion.
Diversification Opportunities for Insumos Agroquimicos and Enel Generacion
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Insumos and Enel is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Insumos Agroquimicos SA and Enel Generacion Costanera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacion Costanera and Insumos Agroquimicos 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 Insumos Agroquimicos SA are associated (or correlated) with Enel Generacion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacion Costanera has no effect on the direction of Insumos Agroquimicos i.e., Insumos Agroquimicos and Enel Generacion go up and down completely randomly.
Pair Corralation between Insumos Agroquimicos and Enel Generacion
If you would invest 48,350 in Enel Generacion Costanera on November 2, 2024 and sell it today you would earn a total of 11,950 from holding Enel Generacion Costanera or generate 24.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insumos Agroquimicos SA vs. Enel Generacion Costanera
Performance |
| Timeline |
| Insumos Agroquimicos |
| Enel Generacion Costanera |
Insumos Agroquimicos and Enel Generacion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insumos Agroquimicos and Enel Generacion
The main advantage of trading using opposite Insumos Agroquimicos and Enel Generacion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insumos Agroquimicos position performs unexpectedly, Enel Generacion 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 Generacion will offset losses from the drop in Enel Generacion's long position.| Insumos Agroquimicos vs. Agrometal SAI | Insumos Agroquimicos vs. Transportadora de Gas | Insumos Agroquimicos vs. Harmony Gold Mining |
| Enel Generacion vs. Boldt SA | Enel Generacion vs. Agrometal SAI | Enel Generacion vs. United States Steel | Enel Generacion vs. Capex SA |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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