Correlation Between InRetail Peru and ENGIE Energia
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By analyzing existing cross correlation between InRetail Peru Corp and ENGIE Energia Peru, you can compare the effects of market volatilities on InRetail Peru and ENGIE Energia 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 InRetail Peru with a short position of ENGIE Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of InRetail Peru and ENGIE Energia.
Diversification Opportunities for InRetail Peru and ENGIE Energia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InRetail and ENGIE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding InRetail Peru Corp and ENGIE Energia Peru in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENGIE Energia Peru and InRetail Peru 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 InRetail Peru Corp are associated (or correlated) with ENGIE Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENGIE Energia Peru has no effect on the direction of InRetail Peru i.e., InRetail Peru and ENGIE Energia go up and down completely randomly.
Pair Corralation between InRetail Peru and ENGIE Energia
Assuming the 90 days trading horizon InRetail Peru Corp is expected to generate 0.89 times more return on investment than ENGIE Energia. However, InRetail Peru Corp is 1.12 times less risky than ENGIE Energia. It trades about -0.02 of its potential returns per unit of risk. ENGIE Energia Peru is currently generating about -0.03 per unit of risk. If you would invest 3,500 in InRetail Peru Corp on September 3, 2024 and sell it today you would lose (395.00) from holding InRetail Peru Corp or give up 11.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.97% |
| Values | Daily Returns |
InRetail Peru Corp vs. ENGIE Energia Peru
Performance |
| Timeline |
| InRetail Peru Corp |
| ENGIE Energia Peru |
InRetail Peru and ENGIE Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InRetail Peru and ENGIE Energia
The main advantage of trading using opposite InRetail Peru and ENGIE Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InRetail Peru position performs unexpectedly, ENGIE Energia 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 ENGIE Energia will offset losses from the drop in ENGIE Energia's long position.The idea behind InRetail Peru Corp and ENGIE Energia Peru pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ENGIE Energia vs. Banco de Credito | ENGIE Energia vs. InRetail Peru Corp | ENGIE Energia vs. Southern Copper Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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