Correlation Between Companhia Energtica and Eneva SA
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica 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 Companhia Energtica and Eneva SA 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 Eneva SA, you can compare the effects of market volatilities on Companhia Energtica 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 Companhia Energtica with a short position of Eneva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Eneva SA.
Diversification Opportunities for Companhia Energtica and Eneva SA
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Eneva is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Eneva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneva SA 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 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 Companhia Energtica i.e., Companhia Energtica and Eneva SA go up and down completely randomly.
Pair Corralation between Companhia Energtica and Eneva SA
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 0.78 times more return on investment than Eneva SA. However, Companhia Energtica de is 1.28 times less risky than Eneva SA. It trades about 0.17 of its potential returns per unit of risk. Eneva SA is currently generating about -0.59 per unit of risk. If you would invest 1,648 in Companhia Energtica de on August 24, 2024 and sell it today you would earn a total of 56.00 from holding Companhia Energtica de or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Energtica de vs. Eneva SA
Performance |
| Timeline |
| Companhia Energtica |
| Eneva SA |
Companhia Energtica and Eneva SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and Eneva SA
The main advantage of trading using opposite Companhia Energtica and Eneva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica 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.| Companhia Energtica vs. NextEra Energy | Companhia Energtica vs. Dominion Energy | Companhia Energtica vs. Transmissora Aliana de | Companhia Energtica vs. CPFL Energia 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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