Correlation Between CPFL Energia and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both CPFL Energia and ATMA Participaes 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 CPFL Energia and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPFL Energia SA and ATMA Participaes SA, you can compare the effects of market volatilities on CPFL Energia and ATMA Participaes 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 CPFL Energia with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPFL Energia and ATMA Participaes.
Diversification Opportunities for CPFL Energia and ATMA Participaes
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPFL and ATMA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CPFL Energia SA and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and CPFL Energia 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 CPFL Energia SA are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of CPFL Energia i.e., CPFL Energia and ATMA Participaes go up and down completely randomly.
Pair Corralation between CPFL Energia and ATMA Participaes
Assuming the 90 days trading horizon CPFL Energia SA is expected to generate 0.95 times more return on investment than ATMA Participaes. However, CPFL Energia SA is 1.05 times less risky than ATMA Participaes. It trades about 0.14 of its potential returns per unit of risk. ATMA Participaes SA is currently generating about 0.01 per unit of risk. If you would invest 3,324 in CPFL Energia SA on November 18, 2024 and sell it today you would earn a total of 116.00 from holding CPFL Energia SA or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPFL Energia SA vs. ATMA Participaes SA
Performance |
| Timeline |
| CPFL Energia SA |
| ATMA Participaes |
CPFL Energia and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPFL Energia and ATMA Participaes
The main advantage of trading using opposite CPFL Energia and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPFL Energia position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.| CPFL Energia vs. The Hartford Financial | CPFL Energia vs. NXP Semiconductors NV | CPFL Energia vs. Autohome | CPFL Energia vs. Check Point Software |
| ATMA Participaes vs. Triunfo Participaes e | ATMA Participaes vs. Allpark Empreendimentos Participaes | ATMA Participaes vs. Azevedo Travassos SA | ATMA Participaes vs. Azevedo Travassos 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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