Correlation Between Banco Pan and Companhiade Eletricidade
Can any of the company-specific risk be diversified away by investing in both Banco Pan and Companhiade Eletricidade 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 Banco Pan and Companhiade Eletricidade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Pan SA and Companhiade Eletricidade do, you can compare the effects of market volatilities on Banco Pan and Companhiade Eletricidade 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 Banco Pan with a short position of Companhiade Eletricidade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Pan and Companhiade Eletricidade.
Diversification Opportunities for Banco Pan and Companhiade Eletricidade
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Banco and Companhiade is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Banco Pan SA and Companhiade Eletricidade do in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhiade Eletricidade and Banco Pan 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 Banco Pan SA are associated (or correlated) with Companhiade Eletricidade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhiade Eletricidade has no effect on the direction of Banco Pan i.e., Banco Pan and Companhiade Eletricidade go up and down completely randomly.
Pair Corralation between Banco Pan and Companhiade Eletricidade
Assuming the 90 days trading horizon Banco Pan SA is expected to under-perform the Companhiade Eletricidade. In addition to that, Banco Pan is 1.57 times more volatile than Companhiade Eletricidade do. It trades about -0.01 of its total potential returns per unit of risk. Companhiade Eletricidade do is currently generating about 0.02 per unit of volatility. If you would invest 3,650 in Companhiade Eletricidade do on September 4, 2024 and sell it today you would earn a total of 120.00 from holding Companhiade Eletricidade do or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.31% |
| Values | Daily Returns |
Banco Pan SA vs. Companhiade Eletricidade do
Performance |
| Timeline |
| Banco Pan SA |
| Companhiade Eletricidade |
Banco Pan and Companhiade Eletricidade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Pan and Companhiade Eletricidade
The main advantage of trading using opposite Banco Pan and Companhiade Eletricidade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Pan position performs unexpectedly, Companhiade Eletricidade 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 Companhiade Eletricidade will offset losses from the drop in Companhiade Eletricidade's long position.| Banco Pan vs. Banco do Estado | Banco Pan vs. MAHLE Metal Leve | Banco Pan vs. Tupy SA | Banco Pan vs. BB Seguridade Participacoes |
| Companhiade Eletricidade vs. Banco BTG Pactual | Companhiade Eletricidade vs. Cosan SA | Companhiade Eletricidade vs. Banco Pan SA | Companhiade Eletricidade vs. Equatorial Energia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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