Correlation Between Companhia Energtica and Cable One
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica and Cable One 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 Cable One 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 Cable One, you can compare the effects of market volatilities on Companhia Energtica and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Cable One.
Diversification Opportunities for Companhia Energtica and Cable One
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Companhia and Cable is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and Cable One go up and down completely randomly.
Pair Corralation between Companhia Energtica and Cable One
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 0.68 times more return on investment than Cable One. However, Companhia Energtica de is 1.46 times less risky than Cable One. It trades about 0.05 of its potential returns per unit of risk. Cable One is currently generating about -0.05 per unit of risk. If you would invest 1,042 in Companhia Energtica de on August 27, 2024 and sell it today you would earn a total of 414.00 from holding Companhia Energtica de or generate 39.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 64.99% |
| Values | Daily Returns |
Companhia Energtica de vs. Cable One
Performance |
| Timeline |
| Companhia Energtica |
| Cable One |
Companhia Energtica and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and Cable One
The main advantage of trading using opposite Companhia Energtica and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Centrais Eltricas Brasileiras | Companhia Energtica vs. Centrais Eltricas Brasileiras | Companhia Energtica vs. Companhia de Saneamento |
| Cable One vs. Extra Space Storage | Cable One vs. Ross Stores | Cable One vs. Delta Air Lines | Cable One vs. Unifique Telecomunicaes 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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