Correlation Between Companhia Energtica and Natura Co
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica and Natura Co 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 Companhia Energtica and Natura Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Energtica de and Natura Co Holding, you can compare the effects of market volatilities on Companhia Energtica and Natura Co 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 Companhia Energtica with a short position of Natura Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Natura Co.
Diversification Opportunities for Companhia Energtica and Natura Co
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Natura is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Natura Co Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura Co Holding and Companhia Energtica 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 Companhia Energtica de are associated (or correlated) with Natura Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura Co Holding has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and Natura Co go up and down completely randomly.
Pair Corralation between Companhia Energtica and Natura Co
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 0.62 times more return on investment than Natura Co. However, Companhia Energtica de is 1.61 times less risky than Natura Co. It trades about -0.02 of its potential returns per unit of risk. Natura Co Holding is currently generating about -0.02 per unit of risk. If you would invest 1,871 in Companhia Energtica de on August 24, 2024 and sell it today you would lose (14.00) from holding Companhia Energtica de or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Energtica de vs. Natura Co Holding
Performance |
| Timeline |
| Companhia Energtica |
| Natura Co Holding |
Companhia Energtica and Natura Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and Natura Co
The main advantage of trading using opposite Companhia Energtica and Natura Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica position performs unexpectedly, Natura Co 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 Natura Co will offset losses from the drop in Natura Co's long position.| Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Companhiade Eletricidade do | Companhia Energtica vs. Empresa Metropolitana de |
| Natura Co vs. Brpr Corporate Offices | Natura Co vs. Beyond Meat | Natura Co vs. Autohome | Natura Co vs. Delta Air Lines |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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