Correlation Between Cia De and ENCE Energa
Can any of the company-specific risk be diversified away by investing in both Cia De 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 Cia De and ENCE Energa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cia de Distribucion and ENCE Energa y, you can compare the effects of market volatilities on Cia De 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 Cia De with a short position of ENCE Energa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cia De and ENCE Energa.
Diversification Opportunities for Cia De and ENCE Energa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cia and ENCE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cia de Distribucion 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 Cia De 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 Cia de Distribucion 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 Cia De i.e., Cia De and ENCE Energa go up and down completely randomly.
Pair Corralation between Cia De and ENCE Energa
Assuming the 90 days trading horizon Cia de Distribucion is expected to under-perform the ENCE Energa. But the stock apears to be less risky and, when comparing its historical volatility, Cia de Distribucion is 1.05 times less risky than ENCE Energa. The stock trades about -0.11 of its potential returns per unit of risk. The ENCE Energa y is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 295.00 in ENCE Energa y on April 22, 2025 and sell it today you would lose (10.00) from holding ENCE Energa y or give up 3.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cia de Distribucion vs. ENCE Energa y
Performance |
Timeline |
Cia de Distribucion |
ENCE Energa y |
Cia De and ENCE Energa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cia De and ENCE Energa
The main advantage of trading using opposite Cia De and ENCE Energa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cia De 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.The idea behind Cia de Distribucion and ENCE Energa y 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.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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