Correlation Between Akamai Technologies, and Centrais Eltricas
Can any of the company-specific risk be diversified away by investing in both Akamai Technologies, and Centrais Eltricas 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 Akamai Technologies, and Centrais Eltricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akamai Technologies, and Centrais Eltricas Brasileiras, you can compare the effects of market volatilities on Akamai Technologies, and Centrais Eltricas 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 Akamai Technologies, with a short position of Centrais Eltricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akamai Technologies, and Centrais Eltricas.
Diversification Opportunities for Akamai Technologies, and Centrais Eltricas
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Akamai and Centrais is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Akamai Technologies, and Centrais Eltricas Brasileiras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Eltricas and Akamai Technologies, 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 Akamai Technologies, are associated (or correlated) with Centrais Eltricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Eltricas has no effect on the direction of Akamai Technologies, i.e., Akamai Technologies, and Centrais Eltricas go up and down completely randomly.
Pair Corralation between Akamai Technologies, and Centrais Eltricas
Assuming the 90 days trading horizon Akamai Technologies, is expected to under-perform the Centrais Eltricas. But the stock apears to be less risky and, when comparing its historical volatility, Akamai Technologies, is 1.48 times less risky than Centrais Eltricas. The stock trades about -0.25 of its potential returns per unit of risk. The Centrais Eltricas Brasileiras is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,257 in Centrais Eltricas Brasileiras on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Centrais Eltricas Brasileiras or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Akamai Technologies, vs. Centrais Eltricas Brasileiras
Performance |
| Timeline |
| Akamai Technologies, |
| Centrais Eltricas |
Akamai Technologies, and Centrais Eltricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akamai Technologies, and Centrais Eltricas
The main advantage of trading using opposite Akamai Technologies, and Centrais Eltricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akamai Technologies, position performs unexpectedly, Centrais Eltricas 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 Centrais Eltricas will offset losses from the drop in Centrais Eltricas' long position.| Akamai Technologies, vs. Bank of America | Akamai Technologies, vs. Broadridge Financial Solutions, | Akamai Technologies, vs. United Rentals | Akamai Technologies, vs. Prudential Financial |
| Centrais Eltricas vs. Ameriprise Financial | Centrais Eltricas vs. G2D Investments | Centrais Eltricas vs. Melco Resorts Entertainment | Centrais Eltricas vs. LPL Financial Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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