Correlation Between Bicicletas Monark and Engie Brasil
Can any of the company-specific risk be diversified away by investing in both Bicicletas Monark 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 Bicicletas Monark and Engie Brasil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bicicletas Monark SA and Engie Brasil Energia, you can compare the effects of market volatilities on Bicicletas Monark 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 Bicicletas Monark with a short position of Engie Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bicicletas Monark and Engie Brasil.
Diversification Opportunities for Bicicletas Monark and Engie Brasil
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bicicletas and Engie is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bicicletas Monark SA 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 Bicicletas Monark 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 Bicicletas Monark SA 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 Bicicletas Monark i.e., Bicicletas Monark and Engie Brasil go up and down completely randomly.
Pair Corralation between Bicicletas Monark and Engie Brasil
Assuming the 90 days trading horizon Bicicletas Monark SA is expected to generate 2.24 times more return on investment than Engie Brasil. However, Bicicletas Monark is 2.24 times more volatile than Engie Brasil Energia. It trades about 0.01 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 31,244 in Bicicletas Monark SA on September 2, 2024 and sell it today you would lose (346.00) from holding Bicicletas Monark SA or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bicicletas Monark SA vs. Engie Brasil Energia
Performance |
| Timeline |
| Bicicletas Monark |
| Engie Brasil Energia |
Bicicletas Monark and Engie Brasil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bicicletas Monark and Engie Brasil
The main advantage of trading using opposite Bicicletas Monark and Engie Brasil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bicicletas Monark 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.| Bicicletas Monark vs. Bombril SA | Bicicletas Monark vs. Bahema Educao SA | Bicicletas Monark vs. Banestes SA | Bicicletas Monark vs. Banco Alfa de |
| Engie Brasil vs. WEG SA | Engie Brasil vs. Transmissora Aliana de | Engie Brasil vs. Fleury SA | Engie Brasil vs. BB Seguridade Participacoes |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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