Correlation Between Urbas Grupo and ENCE Energa
Can any of the company-specific risk be diversified away by investing in both Urbas Grupo and ENCE Energa 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 Urbas Grupo and ENCE Energa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Urbas Grupo Financiero and ENCE Energa y, you can compare the effects of market volatilities on Urbas Grupo and ENCE Energa 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 Urbas Grupo with a short position of ENCE Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urbas Grupo and ENCE Energa.
Diversification Opportunities for Urbas Grupo and ENCE Energa
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Urbas and ENCE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Urbas Grupo Financiero and ENCE Energa y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENCE Energa y and Urbas Grupo 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 Urbas Grupo Financiero are associated (or correlated) with ENCE Energa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENCE Energa y has no effect on the direction of Urbas Grupo i.e., Urbas Grupo and ENCE Energa go up and down completely randomly.
Pair Corralation between Urbas Grupo and ENCE Energa
Assuming the 90 days trading horizon Urbas Grupo Financiero is expected to under-perform the ENCE Energa. In addition to that, Urbas Grupo is 2.4 times more volatile than ENCE Energa y. It trades about -0.04 of its total potential returns per unit of risk. ENCE Energa y is currently generating about -0.01 per unit of volatility. If you would invest 301.00 in ENCE Energa y on September 1, 2024 and sell it today you would lose (25.00) from holding ENCE Energa y or give up 8.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Urbas Grupo Financiero vs. ENCE Energa y
Performance |
| Timeline |
| Urbas Grupo Financiero |
| ENCE Energa y |
Urbas Grupo and ENCE Energa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urbas Grupo and ENCE Energa
The main advantage of trading using opposite Urbas Grupo and ENCE Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urbas Grupo position performs unexpectedly, ENCE Energa 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 ENCE Energa will offset losses from the drop in ENCE Energa's long position.| Urbas Grupo vs. Naturhouse Health SA | Urbas Grupo vs. Cellnex Telecom SA | Urbas Grupo vs. Home Capital Rentals | Urbas Grupo vs. Inhome Prime Properties |
| ENCE Energa vs. Acerinox | ENCE Energa vs. CIE Automotive SA | ENCE Energa vs. Mapfre | ENCE Energa vs. ArcelorMittal SA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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