Correlation Between APS Energia and Carlson Investments
Can any of the company-specific risk be diversified away by investing in both APS Energia and Carlson Investments 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 APS Energia and Carlson Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APS Energia SA and Carlson Investments SA, you can compare the effects of market volatilities on APS Energia and Carlson Investments 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 APS Energia with a short position of Carlson Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of APS Energia and Carlson Investments.
Diversification Opportunities for APS Energia and Carlson Investments
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between APS and Carlson is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding APS Energia SA and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and APS Energia 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 APS Energia SA are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of APS Energia i.e., APS Energia and Carlson Investments go up and down completely randomly.
Pair Corralation between APS Energia and Carlson Investments
Assuming the 90 days trading horizon APS Energia SA is expected to generate 0.74 times more return on investment than Carlson Investments. However, APS Energia SA is 1.36 times less risky than Carlson Investments. It trades about 0.21 of its potential returns per unit of risk. Carlson Investments SA is currently generating about 0.07 per unit of risk. If you would invest 232.00 in APS Energia SA on August 30, 2024 and sell it today you would earn a total of 38.00 from holding APS Energia SA or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APS Energia SA vs. Carlson Investments SA
Performance |
| Timeline |
| APS Energia SA |
| Carlson Investments |
APS Energia and Carlson Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APS Energia and Carlson Investments
The main advantage of trading using opposite APS Energia and Carlson Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APS Energia position performs unexpectedly, Carlson Investments 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 Carlson Investments will offset losses from the drop in Carlson Investments' long position.| APS Energia vs. Asseco Business Solutions | APS Energia vs. Detalion Games SA | APS Energia vs. Asseco South Eastern | APS Energia vs. Vercom SA |
| Carlson Investments vs. Centrum Finansowe Banku | Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Detalion Games SA | Carlson Investments vs. CFI Holding SA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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