Correlation Between Companhia Energtica and CTEEP Companhia
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica and CTEEP Companhia 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 CTEEP Companhia 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 CTEEP Companhia, you can compare the effects of market volatilities on Companhia Energtica and CTEEP Companhia 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 CTEEP Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and CTEEP Companhia.
Diversification Opportunities for Companhia Energtica and CTEEP Companhia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and CTEEP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and CTEEP Companhia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTEEP Companhia 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 CTEEP Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTEEP Companhia has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and CTEEP Companhia go up and down completely randomly.
Pair Corralation between Companhia Energtica and CTEEP Companhia
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 2.97 times more return on investment than CTEEP Companhia. However, Companhia Energtica is 2.97 times more volatile than CTEEP Companhia. It trades about 0.1 of its potential returns per unit of risk. CTEEP Companhia is currently generating about -0.08 per unit of risk. If you would invest 1,416 in Companhia Energtica de on August 24, 2024 and sell it today you would earn a total of 65.00 from holding Companhia Energtica de or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Energtica de vs. CTEEP Companhia
Performance |
| Timeline |
| Companhia Energtica |
| CTEEP Companhia |
Companhia Energtica and CTEEP Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and CTEEP Companhia
The main advantage of trading using opposite Companhia Energtica and CTEEP Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica position performs unexpectedly, CTEEP Companhia 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 CTEEP Companhia will offset losses from the drop in CTEEP Companhia'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 |
| CTEEP Companhia vs. Transmissora Aliana de | CTEEP Companhia vs. Companhia Paranaense de | CTEEP Companhia vs. BB Seguridade Participacoes | CTEEP Companhia vs. Engie Brasil Energia |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |