Correlation Between MGE Energy and Enel Chile
Can any of the company-specific risk be diversified away by investing in both MGE Energy 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 MGE Energy and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGE Energy and Enel Chile SA, you can compare the effects of market volatilities on MGE Energy 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 MGE Energy with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGE Energy and Enel Chile.
Diversification Opportunities for MGE Energy and Enel Chile
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MGE and Enel is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MGE Energy 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 MGE Energy 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 MGE Energy 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 MGE Energy i.e., MGE Energy and Enel Chile go up and down completely randomly.
Pair Corralation between MGE Energy and Enel Chile
Given the investment horizon of 90 days MGE Energy is expected to generate 67.22 times less return on investment than Enel Chile. But when comparing it to its historical volatility, MGE Energy is 1.07 times less risky than Enel Chile. It trades about 0.0 of its potential returns per unit of risk. Enel Chile SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 283.00 in Enel Chile SA on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Enel Chile SA or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
MGE Energy vs. Enel Chile SA
Performance |
| Timeline |
| MGE Energy |
| Enel Chile SA |
MGE Energy and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGE Energy and Enel Chile
The main advantage of trading using opposite MGE Energy and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGE Energy 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.| MGE Energy vs. CMS Energy | MGE Energy vs. Ameren Corp | MGE Energy vs. Pinnacle West Capital | MGE Energy vs. Evergy, |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |