Correlation Between Enel Chile and CK Infrastructure

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

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

Diversification Opportunities for Enel Chile and CK Infrastructure

0.25

Correlation Coefficient

Enel Chile  CK Infrastructure

Modest diversification

The 3 months correlation between Enel and CKISF is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Enel Chile SA and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure and Enel Chile 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 Chile SA are associated (or correlated) with CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of Enel Chile i.e., Enel Chile and CK Infrastructure go up and down completely randomly.

Pair Corralation between Enel Chile and CK Infrastructure

Given the investment horizon of 90 days Enel Chile SA is expected to generate 4.76 times more return on investment than CK Infrastructure. However, Enel Chile is 4.76 times more volatile than CK Infrastructure Holdings. It trades about 0.03 of its potential returns per unit of risk. CK Infrastructure Holdings is currently generating about 0.11 per unit of risk. If you would invest  278.00  in Enel Chile SA on March 14, 2024 and sell it today you would earn a total of  8.00  from holding Enel Chile SA or generate 2.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Enel Chile SA  vs.  CK Infrastructure Holdings

Enel Chile SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enel Chile SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Enel Chile is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

CK Infrastructure

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CK Infrastructure Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CK Infrastructure is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Enel Chile and CK Infrastructure

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

The idea behind Enel Chile SA and CK Infrastructure Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.