Correlation Between Companhia Energetica and Electricite
Can any of the company-specific risk be diversified away by investing in both Companhia Energetica and Electricite 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 Electricite 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 Electricite De France, you can compare the effects of market volatilities on Companhia Energetica and Electricite 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 Electricite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energetica and Electricite.
Diversification Opportunities for Companhia Energetica and Electricite
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Electricite is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energetica de and Electricite De France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electricite De France 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 Electricite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electricite De France has no effect on the direction of Companhia Energetica i.e., Companhia Energetica and Electricite go up and down completely randomly.
Pair Corralation between Companhia Energetica and Electricite
If you would invest 193.00 in Companhia Energetica de on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Companhia Energetica de or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Companhia Energetica de vs. Electricite De France
Performance |
| Timeline |
| Companhia Energetica |
| Electricite De France |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Companhia Energetica and Electricite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energetica and Electricite
The main advantage of trading using opposite Companhia Energetica and Electricite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energetica position performs unexpectedly, Electricite 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 Electricite will offset losses from the drop in Electricite's long position.| Companhia Energetica vs. NorthWestern | Companhia Energetica vs. Montauk Renewables | Companhia Energetica vs. Allete Inc | Companhia Energetica vs. Companhia Paranaense de |
| Electricite vs. RWE AG PK | Electricite vs. ENEL Societa per | Electricite vs. Companhia Paranaense de | Electricite vs. Iberdrola 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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