Correlation Between BB Seguridade and Afluente Transmisso
Can any of the company-specific risk be diversified away by investing in both BB Seguridade and Afluente Transmisso 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 BB Seguridade and Afluente Transmisso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Seguridade Participacoes and Afluente Transmisso de, you can compare the effects of market volatilities on BB Seguridade and Afluente Transmisso 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 BB Seguridade with a short position of Afluente Transmisso. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Seguridade and Afluente Transmisso.
Diversification Opportunities for BB Seguridade and Afluente Transmisso
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBSE3 and Afluente is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Afluente Transmisso de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afluente Transmisso and BB Seguridade 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 BB Seguridade Participacoes are associated (or correlated) with Afluente Transmisso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afluente Transmisso has no effect on the direction of BB Seguridade i.e., BB Seguridade and Afluente Transmisso go up and down completely randomly.
Pair Corralation between BB Seguridade and Afluente Transmisso
Assuming the 90 days trading horizon BB Seguridade Participacoes is expected to under-perform the Afluente Transmisso. But the stock apears to be less risky and, when comparing its historical volatility, BB Seguridade Participacoes is 2.21 times less risky than Afluente Transmisso. The stock trades about -0.09 of its potential returns per unit of risk. The Afluente Transmisso de is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 704.00 in Afluente Transmisso de on September 1, 2024 and sell it today you would lose (1.00) from holding Afluente Transmisso de or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Seguridade Participacoes vs. Afluente Transmisso de
Performance |
| Timeline |
| BB Seguridade Partic |
| Afluente Transmisso |
BB Seguridade and Afluente Transmisso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Seguridade and Afluente Transmisso
The main advantage of trading using opposite BB Seguridade and Afluente Transmisso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Seguridade position performs unexpectedly, Afluente Transmisso 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 Afluente Transmisso will offset losses from the drop in Afluente Transmisso's long position.| BB Seguridade vs. Transmissora Aliana de | BB Seguridade vs. Banco do Brasil | BB Seguridade vs. Itasa Investimentos | BB Seguridade vs. Engie Brasil Energia |
| Afluente Transmisso vs. BB Seguridade Participacoes | Afluente Transmisso vs. Engie Brasil Energia | Afluente Transmisso vs. CTEEP Companhia | Afluente Transmisso vs. Itasa Investimentos |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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