Correlation Between Centrais Elétricas and Hawaiian Electric
Can any of the company-specific risk be diversified away by investing in both Centrais Elétricas and Hawaiian Electric 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 Hawaiian Electric 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 Hawaiian Electric Industries, you can compare the effects of market volatilities on Centrais Elétricas and Hawaiian Electric 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 Hawaiian Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Elétricas and Hawaiian Electric.
Diversification Opportunities for Centrais Elétricas and Hawaiian Electric
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrais and Hawaiian is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Eltricas Brasileiras and Hawaiian Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Electric 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 Hawaiian Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Electric has no effect on the direction of Centrais Elétricas i.e., Centrais Elétricas and Hawaiian Electric go up and down completely randomly.
Pair Corralation between Centrais Elétricas and Hawaiian Electric
Assuming the 90 days horizon Centrais Eltricas Brasileiras is expected to generate 0.55 times more return on investment than Hawaiian Electric. However, Centrais Eltricas Brasileiras is 1.82 times less risky than Hawaiian Electric. It trades about 0.01 of its potential returns per unit of risk. Hawaiian Electric Industries is currently generating about -0.03 per unit of risk. If you would invest 748.00 in Centrais Eltricas Brasileiras on August 28, 2024 and sell it today you would lose (51.00) from holding Centrais Eltricas Brasileiras or give up 6.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Eltricas Brasileiras vs. Hawaiian Electric Industries
Performance |
| Timeline |
| Centrais Elétricas |
| Hawaiian Electric |
Centrais Elétricas and Hawaiian Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Elétricas and Hawaiian Electric
The main advantage of trading using opposite Centrais Elétricas and Hawaiian Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Elétricas position performs unexpectedly, Hawaiian Electric 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 Hawaiian Electric will offset losses from the drop in Hawaiian Electric's long position.| Centrais Elétricas vs. Advent Technologies Holdings | Centrais Elétricas vs. Eos Energy Enterprises | Centrais Elétricas vs. CuriosityStream |
| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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