Correlation Between Companhia Energtica and SSE PLC
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica and SSE PLC 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 SSE PLC 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 SSE PLC ADR, you can compare the effects of market volatilities on Companhia Energtica and SSE PLC 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 SSE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and SSE PLC.
Diversification Opportunities for Companhia Energtica and SSE PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Companhia and SSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and SSE PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSE PLC ADR 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 SSE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSE PLC ADR has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and SSE PLC go up and down completely randomly.
Pair Corralation between Companhia Energtica and SSE PLC
If you would invest (100.00) in Companhia Energtica de on September 12, 2024 and sell it today you would earn a total of 100.00 from holding Companhia Energtica de or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Companhia Energtica de vs. SSE PLC ADR
Performance |
| Timeline |
| Companhia Energtica |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| SSE PLC ADR |
Companhia Energtica and SSE PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and SSE PLC
The main advantage of trading using opposite Companhia Energtica and SSE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica position performs unexpectedly, SSE PLC 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 SSE PLC will offset losses from the drop in SSE PLC's long position.| Companhia Energtica vs. MINCO SILVER | Companhia Energtica vs. Sportsmans Warehouse Holdings | Companhia Energtica vs. Fukuyama Transporting Co | Companhia Energtica vs. COLUMBIA SPORTSWEAR |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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