Correlation Between Enel Generacin and Invertec Foods

Can any of the company-specific risk be diversified away by investing in both Enel Generacin and Invertec Foods 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 Invertec Foods 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 Invertec Foods SA, you can compare the effects of market volatilities on Enel Generacin and Invertec Foods 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 Invertec Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel Generacin and Invertec Foods.

Diversification Opportunities for Enel Generacin and Invertec Foods

0.0

Correlation Coefficient

Enel Generacin  Invertec Foods

Pay attention - limited upside

The 3 months correlation between Enel and Invertec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enel Generacin Chile and Invertec Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invertec Foods 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 Invertec Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invertec Foods SA has no effect on the direction of Enel Generacin i.e., Enel Generacin and Invertec Foods go up and down completely randomly.

Pair Corralation between Enel Generacin and Invertec Foods

If you would invest  32,911  in Enel Generacin Chile on September 12, 2024 and sell it today you would earn a total of  4,353  from holding Enel Generacin Chile or generate 13.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Enel Generacin Chile  vs.  Invertec Foods SA

Enel Generacin Chile

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enel Generacin Chile are ranked lower than 21 (%) 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.

Invertec Foods SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invertec Foods SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Invertec Foods is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Enel Generacin and Invertec Foods

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

The idea behind Enel Generacin Chile and Invertec Foods 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.