Correlation Between Companhia Energtica and Companhia Siderrgica
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica and Companhia Siderrgica 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 Companhia Siderrgica 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 Companhia Siderrgica Nacional, you can compare the effects of market volatilities on Companhia Energtica and Companhia Siderrgica 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 Companhia Siderrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Companhia Siderrgica.
Diversification Opportunities for Companhia Energtica and Companhia Siderrgica
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Companhia is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Companhia Siderrgica Nacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Siderrgica 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 Companhia Siderrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Siderrgica has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and Companhia Siderrgica go up and down completely randomly.
Pair Corralation between Companhia Energtica and Companhia Siderrgica
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 1.61 times more return on investment than Companhia Siderrgica. However, Companhia Energtica is 1.61 times more volatile than Companhia Siderrgica Nacional. It trades about 0.05 of its potential returns per unit of risk. Companhia Siderrgica Nacional is currently generating about 0.01 per unit of risk. If you would invest 662.00 in Companhia Energtica de on August 27, 2024 and sell it today you would earn a total of 508.00 from holding Companhia Energtica de or generate 76.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Companhia Energtica de vs. Companhia Siderrgica Nacional
Performance |
| Timeline |
| Companhia Energtica |
| Companhia Siderrgica |
Companhia Energtica and Companhia Siderrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energtica and Companhia Siderrgica
The main advantage of trading using opposite Companhia Energtica and Companhia Siderrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica position performs unexpectedly, Companhia Siderrgica 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 Companhia Siderrgica will offset losses from the drop in Companhia Siderrgica's long position.| Companhia Energtica vs. Usinas Siderrgicas de | Companhia Energtica vs. Companhia Siderrgica Nacional | Companhia Energtica vs. Gerdau SA | Companhia Energtica vs. Companhia Paranaense de |
| Companhia Siderrgica vs. Palantir Technologies | Companhia Siderrgica vs. Warner Music Group | Companhia Siderrgica vs. Verizon Communications | Companhia Siderrgica vs. Dell Technologies |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |