Correlation Between Centrais Elétricas and DTE Energy
Can any of the company-specific risk be diversified away by investing in both Centrais Elétricas and DTE Energy 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 Centrais Elétricas and DTE Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Eltricas Brasileiras and DTE Energy, you can compare the effects of market volatilities on Centrais Elétricas and DTE Energy 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 Centrais Elétricas with a short position of DTE Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Elétricas and DTE Energy.
Diversification Opportunities for Centrais Elétricas and DTE Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centrais and DTE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Eltricas Brasileiras and DTE Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTE Energy and Centrais Elétricas 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 Centrais Eltricas Brasileiras are associated (or correlated) with DTE Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTE Energy has no effect on the direction of Centrais Elétricas i.e., Centrais Elétricas and DTE Energy go up and down completely randomly.
Pair Corralation between Centrais Elétricas and DTE Energy
Assuming the 90 days horizon Centrais Eltricas Brasileiras is expected to under-perform the DTE Energy. In addition to that, Centrais Elétricas is 2.11 times more volatile than DTE Energy. It trades about -0.02 of its total potential returns per unit of risk. DTE Energy is currently generating about 0.06 per unit of volatility. If you would invest 10,383 in DTE Energy on November 9, 2024 and sell it today you would earn a total of 1,873 from holding DTE Energy or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Eltricas Brasileiras vs. DTE Energy
Performance |
| Timeline |
| Centrais Elétricas |
| DTE Energy |
Centrais Elétricas and DTE Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Elétricas and DTE Energy
The main advantage of trading using opposite Centrais Elétricas and DTE Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Elétricas position performs unexpectedly, DTE Energy 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 DTE Energy will offset losses from the drop in DTE Energy's long position.| Centrais Elétricas vs. Nextera Energy | Centrais Elétricas vs. Consumers Energy | Centrais Elétricas vs. Duke Energy | Centrais Elétricas vs. Red Electrica Corporacion |
| DTE Energy vs. Alliant Energy Corp | DTE Energy vs. Ameren Corp | DTE Energy vs. CenterPoint Energy | DTE Energy vs. Pinnacle West Capital |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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