Correlation Between Kinetik Holdings and Enel Chile

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

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

Diversification Opportunities for Kinetik Holdings and Enel Chile

-0.15

Correlation Coefficient

Kinetik Holdings  Enel Chile

Good diversification

The 3 months correlation between Kinetik and Enel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings 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 Kinetik Holdings 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 Kinetik Holdings 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 Kinetik Holdings i.e., Kinetik Holdings and Enel Chile go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Enel Chile

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 32.94 times less return on investment than Enel Chile. In addition to that, Kinetik Holdings is 1.47 times more volatile than Enel Chile SA. It trades about 0.0 of its total potential returns per unit of risk. Enel Chile SA is currently generating about 0.2 per unit of volatility. If you would invest  283.00  in Enel Chile SA on December 19, 2024 and sell it today you would earn a total of  58.00  from holding Enel Chile SA or generate 20.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kinetik Holdings  vs.  Enel Chile SA

Kinetik Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetik Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kinetik Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Enel Chile SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enel Chile SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Enel Chile exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinetik Holdings and Enel Chile

The main advantage of trading using opposite Kinetik Holdings and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings 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.

The idea behind Kinetik Holdings and Enel Chile 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.