Correlation Between CTT Correios and EDP Energias
Can any of the company-specific risk be diversified away by investing in both CTT Correios and EDP Energias 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 CTT Correios and EDP Energias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Correios de and EDP Energias, you can compare the effects of market volatilities on CTT Correios and EDP Energias 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 CTT Correios with a short position of EDP Energias. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Correios and EDP Energias.
Diversification Opportunities for CTT Correios and EDP Energias
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CTT and EDP is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios de and EDP Energias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias and CTT Correios 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 CTT Correios de are associated (or correlated) with EDP Energias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDP Energias has no effect on the direction of CTT Correios i.e., CTT Correios and EDP Energias go up and down completely randomly.
Pair Corralation between CTT Correios and EDP Energias
Assuming the 90 days trading horizon CTT Correios de is expected to generate 1.03 times more return on investment than EDP Energias. However, CTT Correios is 1.03 times more volatile than EDP Energias. It trades about 0.08 of its potential returns per unit of risk. EDP Energias is currently generating about -0.03 per unit of risk. If you would invest 352.00 in CTT Correios de on August 29, 2024 and sell it today you would earn a total of 93.00 from holding CTT Correios de or generate 26.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Correios de vs. EDP Energias
Performance |
| Timeline |
| CTT Correios de |
| EDP Energias |
CTT Correios and EDP Energias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Correios and EDP Energias
The main advantage of trading using opposite CTT Correios and EDP Energias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Correios position performs unexpectedly, EDP Energias 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 EDP Energias will offset losses from the drop in EDP Energias' long position.| CTT Correios vs. Banco Comercial Portugues | CTT Correios vs. Sonae SGPS SA | CTT Correios vs. Galp Energia SGPS | CTT Correios vs. NOS SGPS SA |
| EDP Energias vs. EDP Renovaveis | EDP Energias vs. Galp Energia SGPS | EDP Energias vs. Sonae SGPS SA | EDP Energias vs. Banco Comercial Portugues |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |