Correlation Between Companhia Energetica and Aberdeen Standard
Can any of the company-specific risk be diversified away by investing in both Companhia Energetica and Aberdeen Standard 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 Energetica and Aberdeen Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Energetica de and Aberdeen Standard Global, you can compare the effects of market volatilities on Companhia Energetica and Aberdeen Standard 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 Energetica with a short position of Aberdeen Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energetica and Aberdeen Standard.
Diversification Opportunities for Companhia Energetica and Aberdeen Standard
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Aberdeen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energetica de and Aberdeen Standard Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Standard Global and Companhia Energetica 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 Energetica de are associated (or correlated) with Aberdeen Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Standard Global has no effect on the direction of Companhia Energetica i.e., Companhia Energetica and Aberdeen Standard go up and down completely randomly.
Pair Corralation between Companhia Energetica and Aberdeen Standard
Considering the 90-day investment horizon Companhia Energetica de is expected to generate 2.34 times more return on investment than Aberdeen Standard. However, Companhia Energetica is 2.34 times more volatile than Aberdeen Standard Global. It trades about 0.05 of its potential returns per unit of risk. Aberdeen Standard Global is currently generating about 0.07 per unit of risk. If you would invest 128.00 in Companhia Energetica de on August 31, 2024 and sell it today you would earn a total of 67.00 from holding Companhia Energetica de or generate 52.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Companhia Energetica de vs. Aberdeen Standard Global
Performance |
| Timeline |
| Companhia Energetica |
| Aberdeen Standard Global |
Companhia Energetica and Aberdeen Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energetica and Aberdeen Standard
The main advantage of trading using opposite Companhia Energetica and Aberdeen Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energetica position performs unexpectedly, Aberdeen Standard 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 Aberdeen Standard will offset losses from the drop in Aberdeen Standard's long position.| Companhia Energetica vs. NorthWestern | Companhia Energetica vs. Montauk Renewables | Companhia Energetica vs. Allete Inc | Companhia Energetica vs. Companhia Paranaense de |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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