Correlation Between NiSource and Enel Chile
Can any of the company-specific risk be diversified away by investing in both NiSource 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 NiSource and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Enel Chile SA, you can compare the effects of market volatilities on NiSource 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 NiSource with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Enel Chile.
Diversification Opportunities for NiSource and Enel Chile
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NiSource and Enel is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NiSource 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 NiSource 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 NiSource 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 NiSource i.e., NiSource and Enel Chile go up and down completely randomly.
Pair Corralation between NiSource and Enel Chile
Allowing for the 90-day total investment horizon NiSource is expected to generate 0.53 times more return on investment than Enel Chile. However, NiSource is 1.87 times less risky than Enel Chile. It trades about 0.15 of its potential returns per unit of risk. Enel Chile SA is currently generating about 0.0 per unit of risk. If you would invest 2,515 in NiSource on September 14, 2024 and sell it today you would earn a total of 1,140 from holding NiSource or generate 45.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Enel Chile SA
Performance |
| Timeline |
| NiSource |
| Enel Chile SA |
NiSource and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Enel Chile
The main advantage of trading using opposite NiSource and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource 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.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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