Correlation Between FDO INV and Energisa
Can any of the company-specific risk be diversified away by investing in both FDO INV and Energisa 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 FDO INV and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FDO INV IMOB and Energisa SA, you can compare the effects of market volatilities on FDO INV and Energisa 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 FDO INV with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and Energisa.
Diversification Opportunities for FDO INV and Energisa
Pay attention - limited upside
The 3 months correlation between FDO and Energisa is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding FDO INV IMOB and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and FDO INV 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 FDO INV IMOB are associated (or correlated) with Energisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa SA has no effect on the direction of FDO INV i.e., FDO INV and Energisa go up and down completely randomly.
Pair Corralation between FDO INV and Energisa
Assuming the 90 days trading horizon FDO INV IMOB is expected to generate 0.02 times more return on investment than Energisa. However, FDO INV IMOB is 50.29 times less risky than Energisa. It trades about -0.22 of its potential returns per unit of risk. Energisa SA is currently generating about -0.23 per unit of risk. If you would invest 144,490 in FDO INV IMOB on September 15, 2024 and sell it today you would lose (240.00) from holding FDO INV IMOB or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FDO INV IMOB vs. Energisa SA
Performance |
| Timeline |
| FDO INV IMOB |
| Energisa SA |
FDO INV and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FDO INV and Energisa
The main advantage of trading using opposite FDO INV and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDO INV position performs unexpectedly, Energisa 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 Energisa will offset losses from the drop in Energisa's long position.| FDO INV vs. BTG Pactual Logstica | FDO INV vs. Plano Plano Desenvolvimento | FDO INV vs. Companhia Habitasul de | FDO INV vs. Telefonaktiebolaget LM Ericsson |
| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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