Correlation Between BB Seguridade and Engie Brasil
Can any of the company-specific risk be diversified away by investing in both BB Seguridade and Engie Brasil 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 Engie Brasil 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 Engie Brasil Energia, you can compare the effects of market volatilities on BB Seguridade and Engie Brasil 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 Engie Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Seguridade and Engie Brasil.
Diversification Opportunities for BB Seguridade and Engie Brasil
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BBSE3 and Engie is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Engie Brasil Energia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie Brasil Energia 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 Engie Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie Brasil Energia has no effect on the direction of BB Seguridade i.e., BB Seguridade and Engie Brasil go up and down completely randomly.
Pair Corralation between BB Seguridade and Engie Brasil
Assuming the 90 days trading horizon BB Seguridade Participacoes is expected to generate 1.37 times more return on investment than Engie Brasil. However, BB Seguridade is 1.37 times more volatile than Engie Brasil Energia. It trades about 0.04 of its potential returns per unit of risk. Engie Brasil Energia is currently generating about 0.02 per unit of risk. If you would invest 2,664 in BB Seguridade Participacoes on August 24, 2024 and sell it today you would earn a total of 684.00 from holding BB Seguridade Participacoes or generate 25.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.8% |
| Values | Daily Returns |
BB Seguridade Participacoes vs. Engie Brasil Energia
Performance |
| Timeline |
| BB Seguridade Partic |
| Engie Brasil Energia |
BB Seguridade and Engie Brasil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Seguridade and Engie Brasil
The main advantage of trading using opposite BB Seguridade and Engie Brasil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Seguridade position performs unexpectedly, Engie Brasil 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 Engie Brasil will offset losses from the drop in Engie Brasil'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 |
| Engie Brasil vs. WEG SA | Engie Brasil vs. Automatic Data Processing | Engie Brasil vs. Atom Empreendimentos e | Engie Brasil vs. Neurocrine Biosciences |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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