Correlation Between Enel Generacin and Enjoy SA

Can any of the company-specific risk be diversified away by investing in both Enel Generacin and Enjoy SA 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 Enel Generacin and Enjoy SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enel Generacin Chile and Enjoy SA, you can compare the effects of market volatilities on Enel Generacin and Enjoy SA 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 Enel Generacin with a short position of Enjoy SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacin and Enjoy SA.

Diversification Opportunities for Enel Generacin and Enjoy SA

-0.81

Correlation Coefficient

Enel Generacin  Enjoy SA

Pay attention - limited upside

The 3 months correlation between Enel and Enjoy is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacin Chile and Enjoy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjoy SA and Enel Generacin 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 Enel Generacin Chile are associated (or correlated) with Enjoy SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enjoy SA has no effect on the direction of Enel Generacin i.e., Enel Generacin and Enjoy SA go up and down completely randomly.

Pair Corralation between Enel Generacin and Enjoy SA

Assuming the 90 days trading horizon Enel Generacin Chile is expected to generate 0.48 times more return on investment than Enjoy SA. However, Enel Generacin Chile is 2.07 times less risky than Enjoy SA. It trades about 0.24 of its potential returns per unit of risk. Enjoy SA is currently generating about -0.21 per unit of risk. If you would invest  37,410  in Enel Generacin Chile on December 30, 2024 and sell it today you would earn a total of  6,039  from holding Enel Generacin Chile or generate 16.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Enel Generacin Chile  vs.  Enjoy SA

Enel Generacin Chile

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enel Generacin Chile are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Enel Generacin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Enjoy SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enjoy SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Enel Generacin and Enjoy SA

The main advantage of trading using opposite Enel Generacin and Enjoy SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel Generacin position performs unexpectedly, Enjoy SA 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 Enjoy SA will offset losses from the drop in Enjoy SA's long position.

The idea behind Enel Generacin Chile and Enjoy SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.