Correlation Between BBB Foods and Enel Chile
Can any of the company-specific risk be diversified away by investing in both BBB Foods 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 BBB Foods and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Enel Chile SA, you can compare the effects of market volatilities on BBB Foods 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 BBB Foods with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Enel Chile.
Diversification Opportunities for BBB Foods and Enel Chile
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BBB and Enel is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods 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 BBB Foods 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 BBB Foods 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 BBB Foods i.e., BBB Foods and Enel Chile go up and down completely randomly.
Pair Corralation between BBB Foods and Enel Chile
Given the investment horizon of 90 days BBB Foods is expected to generate 1.29 times more return on investment than Enel Chile. However, BBB Foods is 1.29 times more volatile than Enel Chile SA. It trades about 0.08 of its potential returns per unit of risk. Enel Chile SA is currently generating about 0.09 per unit of risk. If you would invest 2,909 in BBB Foods on October 11, 2024 and sell it today you would earn a total of 101.00 from holding BBB Foods or generate 3.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BBB Foods vs. Enel Chile SA
Performance |
Timeline |
BBB Foods |
Enel Chile SA |
BBB Foods and Enel Chile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BBB Foods and Enel Chile
The main advantage of trading using opposite BBB Foods and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods 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.BBB Foods vs. Lendlease Global Commercial | BBB Foods vs. Mitsubishi UFJ Lease | BBB Foods vs. Definitive Healthcare Corp | BBB Foods vs. First Ship Lease |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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