Correlation Between NRG Energy and Enel Chile
Can any of the company-specific risk be diversified away by investing in both NRG 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 NRG 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 NRG Energy and Enel Chile SA, you can compare the effects of market volatilities on NRG 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 NRG Energy with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and Enel Chile.
Diversification Opportunities for NRG Energy and Enel Chile
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NRG and Enel is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NRG 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 NRG 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 NRG 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 NRG Energy i.e., NRG Energy and Enel Chile go up and down completely randomly.
Pair Corralation between NRG Energy and Enel Chile
Considering the 90-day investment horizon NRG Energy is expected to generate 0.98 times more return on investment than Enel Chile. However, NRG Energy is 1.02 times less risky than Enel Chile. It trades about 0.13 of its potential returns per unit of risk. Enel Chile SA is currently generating about 0.05 per unit of risk. If you would invest 3,039 in NRG Energy on October 13, 2024 and sell it today you would earn a total of 6,900 from holding NRG Energy or generate 227.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRG Energy vs. Enel Chile SA
Performance |
| Timeline |
| NRG Energy |
| Enel Chile SA |
NRG Energy and Enel Chile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and Enel Chile
The main advantage of trading using opposite NRG Energy and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG 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.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Kenon Holdings | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |