Correlation Between SBA Communications and Companhia Energtica
Can any of the company-specific risk be diversified away by investing in both SBA Communications and Companhia Energtica 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 SBA Communications and Companhia Energtica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and Companhia Energtica de, you can compare the effects of market volatilities on SBA Communications and Companhia Energtica 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 SBA Communications with a short position of Companhia Energtica. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and Companhia Energtica.
Diversification Opportunities for SBA Communications and Companhia Energtica
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBA and Companhia is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp and Companhia Energtica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energtica and SBA Communications 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 SBA Communications Corp are associated (or correlated) with Companhia Energtica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energtica has no effect on the direction of SBA Communications i.e., SBA Communications and Companhia Energtica go up and down completely randomly.
Pair Corralation between SBA Communications and Companhia Energtica
Assuming the 90 days trading horizon SBA Communications is expected to generate 11.31 times less return on investment than Companhia Energtica. In addition to that, SBA Communications is 1.68 times more volatile than Companhia Energtica de. It trades about 0.01 of its total potential returns per unit of risk. Companhia Energtica de is currently generating about 0.22 per unit of volatility. If you would invest 181.00 in Companhia Energtica de on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Companhia Energtica de or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SBA Communications Corp vs. Companhia Energtica de
Performance |
| Timeline |
| SBA Communications Corp |
| Companhia Energtica |
SBA Communications and Companhia Energtica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and Companhia Energtica
The main advantage of trading using opposite SBA Communications and Companhia Energtica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications position performs unexpectedly, Companhia Energtica 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 Companhia Energtica will offset losses from the drop in Companhia Energtica's long position.| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
| Companhia Energtica vs. SBA Communications Corp | Companhia Energtica vs. Chuangs China Investments | Companhia Energtica vs. WisdomTree Investments | Companhia Energtica vs. Apollo Investment Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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