Correlation Between Enel Americas and Eversource Energy

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

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

Diversification Opportunities for Enel Americas and Eversource Energy

0.0

Correlation Coefficient

Enel Americas  Eversource Energy

Pay attention - limited upside

The 3 months correlation between Enel and Eversource is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enel Americas SA and Eversource Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eversource Energy and Enel Americas 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 Americas SA are associated (or correlated) with Eversource Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eversource Energy has no effect on the direction of Enel Americas i.e., Enel Americas and Eversource Energy go up and down completely randomly.

Pair Corralation between Enel Americas and Eversource Energy

If you would invest  5,693  in Eversource Energy on January 25, 2024 and sell it today you would earn a total of  391.00  from holding Eversource Energy or generate 6.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Enel Americas SA  vs.  Eversource Energy

Enel Americas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enel Americas SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Enel Americas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eversource Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eversource Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Eversource Energy may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Enel Americas and Eversource Energy

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

The idea behind Enel Americas SA and Eversource Energy 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.