Correlation Between Banco Pan and Eneva SA
Can any of the company-specific risk be diversified away by investing in both Banco Pan and Eneva SA 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 Eneva SA 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 Eneva SA, you can compare the effects of market volatilities on Banco Pan and Eneva SA 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 Eneva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Pan and Eneva SA.
Diversification Opportunities for Banco Pan and Eneva SA
Almost no diversification
The 3 months correlation between Banco and Eneva is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Banco Pan SA and Eneva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneva SA 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 Eneva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneva SA has no effect on the direction of Banco Pan i.e., Banco Pan and Eneva SA go up and down completely randomly.
Pair Corralation between Banco Pan and Eneva SA
Assuming the 90 days trading horizon Banco Pan is expected to generate 1.73 times less return on investment than Eneva SA. But when comparing it to its historical volatility, Banco Pan SA is 1.14 times less risky than Eneva SA. It trades about 0.25 of its potential returns per unit of risk. Eneva SA is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 955.00 in Eneva SA on November 2, 2024 and sell it today you would earn a total of 218.00 from holding Eneva SA or generate 22.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Banco Pan SA vs. Eneva SA
Performance |
| Timeline |
| Banco Pan SA |
| Eneva SA |
Banco Pan and Eneva SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Pan and Eneva SA
The main advantage of trading using opposite Banco Pan and Eneva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Pan position performs unexpectedly, Eneva SA 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 Eneva SA will offset losses from the drop in Eneva SA's long position.| Banco Pan vs. Banco BTG Pactual | Banco Pan vs. Eneva SA | Banco Pan vs. Oi SA | Banco Pan vs. Movida Participaes SA |
| Eneva SA vs. Banco BTG Pactual | Eneva SA vs. Cosan SA | Eneva SA vs. Banco Pan SA | Eneva SA 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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