Correlation Between Korea Electric and Enel Chile
Can any of the company-specific risk be diversified away by investing in both Korea 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 Korea 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 Korea Electric Power and Enel Chile SA, you can compare the effects of market volatilities on Korea 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 Korea Electric with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Enel Chile.
Diversification Opportunities for Korea Electric and Enel Chile
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Enel is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power 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 Korea 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 Korea Electric Power 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 Korea Electric i.e., Korea Electric and Enel Chile go up and down completely randomly.
Pair Corralation between Korea Electric and Enel Chile
Considering the 90-day investment horizon Korea Electric is expected to generate 2.99 times less return on investment than Enel Chile. In addition to that, Korea Electric is 1.03 times more volatile than Enel Chile SA. It trades about 0.02 of its total potential returns per unit of risk. Enel Chile SA is currently generating about 0.06 per unit of volatility. If you would invest 187.00 in Enel Chile SA on November 1, 2024 and sell it today you would earn a total of 117.00 from holding Enel Chile SA or generate 62.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. Enel Chile SA
Performance |
| Timeline |
| Korea Electric Power |
| Enel Chile SA |
Korea Electric and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Enel Chile
The main advantage of trading using opposite Korea Electric and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea 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.| Korea Electric vs. Enel Chile SA | Korea Electric vs. Centrais Eltricas Brasileiras | Korea Electric vs. Central Puerto SA | Korea Electric vs. CMS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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