Correlation Between CPFL Energia and Companhia
Can any of the company-specific risk be diversified away by investing in both CPFL Energia and 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 CPFL Energia and Companhia 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 Companhia de Gs, you can compare the effects of market volatilities on CPFL Energia and 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 CPFL Energia with a short position of Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPFL Energia and Companhia.
Diversification Opportunities for CPFL Energia and Companhia
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPFL and Companhia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CPFL Energia SA and Companhia de Gs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Gs 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 Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Gs has no effect on the direction of CPFL Energia i.e., CPFL Energia and Companhia go up and down completely randomly.
Pair Corralation between CPFL Energia and Companhia
Assuming the 90 days trading horizon CPFL Energia is expected to generate 1.99 times less return on investment than Companhia. But when comparing it to its historical volatility, CPFL Energia SA is 1.83 times less risky than Companhia. It trades about 0.03 of its potential returns per unit of risk. Companhia de Gs is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,799 in Companhia de Gs on January 20, 2025 and sell it today you would earn a total of 2,149 from holding Companhia de Gs or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.84% |
| Values | Daily Returns |
CPFL Energia SA vs. Companhia de Gs
Performance |
| Timeline |
| CPFL Energia SA |
| Companhia de Gs |
CPFL Energia and Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPFL Energia and Companhia
The main advantage of trading using opposite CPFL Energia and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPFL Energia position performs unexpectedly, 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 Companhia will offset losses from the drop in Companhia's long position.| CPFL Energia vs. salesforce inc | CPFL Energia vs. Akamai Technologies, | CPFL Energia vs. GX AI TECH | CPFL Energia vs. Melco Resorts Entertainment |
| Companhia vs. Companhia de Saneamento | Companhia vs. Centrais Eltricas Brasileiras | Companhia vs. Bradespar SA | Companhia vs. Braskem 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |