Correlation Between Capitania Infra and Energisa
Can any of the company-specific risk be diversified away by investing in both Capitania Infra and Energisa 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 Capitania Infra and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitania Infra Fic and Energisa SA, you can compare the effects of market volatilities on Capitania Infra and Energisa 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 Capitania Infra with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitania Infra and Energisa.
Diversification Opportunities for Capitania Infra and Energisa
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Capitania and Energisa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Capitania Infra Fic and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and Capitania Infra 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 Capitania Infra Fic are associated (or correlated) with Energisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa SA has no effect on the direction of Capitania Infra i.e., Capitania Infra and Energisa go up and down completely randomly.
Pair Corralation between Capitania Infra and Energisa
Assuming the 90 days trading horizon Capitania Infra Fic is expected to generate 0.51 times more return on investment than Energisa. However, Capitania Infra Fic is 1.97 times less risky than Energisa. It trades about -0.22 of its potential returns per unit of risk. Energisa SA is currently generating about -0.19 per unit of risk. If you would invest 9,600 in Capitania Infra Fic on September 3, 2024 and sell it today you would lose (935.00) from holding Capitania Infra Fic or give up 9.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitania Infra Fic vs. Energisa SA
Performance |
| Timeline |
| Capitania Infra Fic |
| Energisa SA |
Capitania Infra and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitania Infra and Energisa
The main advantage of trading using opposite Capitania Infra and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitania Infra position performs unexpectedly, Energisa 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 Energisa will offset losses from the drop in Energisa's long position.| Capitania Infra vs. Capitania Agro Strategies | Capitania Infra vs. Capitania Securities II | Capitania Infra vs. RB Capital Office | Capitania Infra vs. Ishares Msci Brazil |
| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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