Correlation Between LATAM Airlines and Enel Generacin
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By analyzing existing cross correlation between LATAM Airlines Group and Enel Generacin Chile, you can compare the effects of market volatilities on LATAM Airlines and Enel Generacin 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 LATAM Airlines with a short position of Enel Generacin. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and Enel Generacin.
Diversification Opportunities for LATAM Airlines and Enel Generacin
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LATAM and Enel is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines Group and Enel Generacin Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel Generacin Chile and LATAM Airlines 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 LATAM Airlines Group are associated (or correlated) with Enel Generacin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel Generacin Chile has no effect on the direction of LATAM Airlines i.e., LATAM Airlines and Enel Generacin go up and down completely randomly.
Pair Corralation between LATAM Airlines and Enel Generacin
Assuming the 90 days trading horizon LATAM Airlines Group is expected to generate 1.58 times more return on investment than Enel Generacin. However, LATAM Airlines is 1.58 times more volatile than Enel Generacin Chile. It trades about 0.11 of its potential returns per unit of risk. Enel Generacin Chile is currently generating about 0.13 per unit of risk. If you would invest 720.00 in LATAM Airlines Group on September 12, 2024 and sell it today you would earn a total of 679.00 from holding LATAM Airlines Group or generate 94.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LATAM Airlines Group vs. Enel Generacin Chile
Performance |
| Timeline |
| LATAM Airlines Group |
| Enel Generacin Chile |
LATAM Airlines and Enel Generacin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LATAM Airlines and Enel Generacin
The main advantage of trading using opposite LATAM Airlines and Enel Generacin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines position performs unexpectedly, Enel Generacin 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 Generacin will offset losses from the drop in Enel Generacin's long position.| LATAM Airlines vs. Falabella | LATAM Airlines vs. Cencosud | LATAM Airlines vs. Enjoy SA | LATAM Airlines vs. Sociedad Qumica y |
| Enel Generacin vs. Enel Amricas SA | Enel Generacin vs. Enel Chile SA | Enel Generacin vs. Aguas Andinas SA | Enel Generacin vs. Parq Arauco |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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