Correlation Between Kenon Holdings and Empresa Distribuidora
Can any of the company-specific risk be diversified away by investing in both Kenon Holdings and Empresa Distribuidora 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 Kenon Holdings and Empresa Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenon Holdings and Empresa Distribuidora y, you can compare the effects of market volatilities on Kenon Holdings and Empresa Distribuidora 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 Kenon Holdings with a short position of Empresa Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and Empresa Distribuidora.
Diversification Opportunities for Kenon Holdings and Empresa Distribuidora
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kenon and Empresa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and Empresa Distribuidora y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresa Distribuidora and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with Empresa Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresa Distribuidora has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and Empresa Distribuidora go up and down completely randomly.
Pair Corralation between Kenon Holdings and Empresa Distribuidora
Considering the 90-day investment horizon Kenon Holdings is expected to generate 6.7 times less return on investment than Empresa Distribuidora. But when comparing it to its historical volatility, Kenon Holdings is 1.67 times less risky than Empresa Distribuidora. It trades about 0.15 of its potential returns per unit of risk. Empresa Distribuidora y is currently generating about 0.58 of returns per unit of risk over similar time horizon. If you would invest 2,577 in Empresa Distribuidora y on August 25, 2024 and sell it today you would earn a total of 1,052 from holding Empresa Distribuidora y or generate 40.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenon Holdings vs. Empresa Distribuidora y
Performance |
| Timeline |
| Kenon Holdings |
| Empresa Distribuidora |
Kenon Holdings and Empresa Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenon Holdings and Empresa Distribuidora
The main advantage of trading using opposite Kenon Holdings and Empresa Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings position performs unexpectedly, Empresa Distribuidora 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 Empresa Distribuidora will offset losses from the drop in Empresa Distribuidora's long position.| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
| Empresa Distribuidora vs. Centrais Electricas Brasileiras | Empresa Distribuidora vs. Enel Chile SA | Empresa Distribuidora vs. Korea Electric Power | Empresa Distribuidora vs. Genie 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |