Correlation Between Suburban Propane and Enel Chile
Can any of the company-specific risk be diversified away by investing in both Suburban Propane 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 Suburban Propane and Enel Chile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suburban Propane Partners and Enel Chile SA, you can compare the effects of market volatilities on Suburban Propane 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 Suburban Propane with a short position of Enel Chile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Enel Chile.
Diversification Opportunities for Suburban Propane and Enel Chile
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suburban and Enel is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners 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 Suburban Propane 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 Suburban Propane Partners 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 Suburban Propane i.e., Suburban Propane and Enel Chile go up and down completely randomly.
Pair Corralation between Suburban Propane and Enel Chile
Considering the 90-day investment horizon Suburban Propane is expected to generate 11.82 times less return on investment than Enel Chile. In addition to that, Suburban Propane is 1.02 times more volatile than Enel Chile SA. It trades about 0.01 of its total potential returns per unit of risk. Enel Chile SA is currently generating about 0.09 per unit of volatility. If you would invest 269.00 in Enel Chile SA on September 25, 2024 and sell it today you would earn a total of 25.00 from holding Enel Chile SA or generate 9.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Suburban Propane Partners vs. Enel Chile SA
Performance |
Timeline |
Suburban Propane Partners |
Enel Chile SA |
Suburban Propane and Enel Chile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suburban Propane and Enel Chile
The main advantage of trading using opposite Suburban Propane and Enel Chile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane 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.Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Spire Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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