Correlation Between Emera Maine and Centrais Electricas
Can any of the company-specific risk be diversified away by investing in both Emera Maine and Centrais Electricas 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 Emera Maine and Centrais Electricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emera Maine PFD and Centrais Electricas Brasileiras, you can compare the effects of market volatilities on Emera Maine and Centrais Electricas 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 Emera Maine with a short position of Centrais Electricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emera Maine and Centrais Electricas.
Diversification Opportunities for Emera Maine and Centrais Electricas
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emera and Centrais is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Emera Maine PFD and Centrais Electricas Brasileira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Electricas and Emera Maine 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 Emera Maine PFD are associated (or correlated) with Centrais Electricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Electricas has no effect on the direction of Emera Maine i.e., Emera Maine and Centrais Electricas go up and down completely randomly.
Pair Corralation between Emera Maine and Centrais Electricas
If you would invest 9,825 in Emera Maine PFD on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Emera Maine PFD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Emera Maine PFD vs. Centrais Electricas Brasileira
Performance |
| Timeline |
| Emera Maine PFD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Centrais Electricas |
Emera Maine and Centrais Electricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emera Maine and Centrais Electricas
The main advantage of trading using opposite Emera Maine and Centrais Electricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emera Maine position performs unexpectedly, Centrais Electricas 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 Electricas will offset losses from the drop in Centrais Electricas' long position.| Emera Maine vs. Cebu Air ADR | Emera Maine vs. Alaska Air Group | Emera Maine vs. Vita Coco | Emera Maine vs. Finnair Oyj |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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