Correlation Between Centrais Elétricas and Pacific Gas
Can any of the company-specific risk be diversified away by investing in both Centrais Elétricas and Pacific Gas 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 Pacific Gas 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 Pacific Gas and, you can compare the effects of market volatilities on Centrais Elétricas and Pacific Gas 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 Pacific Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Elétricas and Pacific Gas.
Diversification Opportunities for Centrais Elétricas and Pacific Gas
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrais and Pacific is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Eltricas Brasileiras and Pacific Gas and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Gas 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 Pacific Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Gas has no effect on the direction of Centrais Elétricas i.e., Centrais Elétricas and Pacific Gas go up and down completely randomly.
Pair Corralation between Centrais Elétricas and Pacific Gas
Assuming the 90 days horizon Centrais Eltricas Brasileiras is expected to under-perform the Pacific Gas. In addition to that, Centrais Elétricas is 2.13 times more volatile than Pacific Gas and. It trades about -0.17 of its total potential returns per unit of risk. Pacific Gas and is currently generating about -0.09 per unit of volatility. If you would invest 2,502 in Pacific Gas and on September 5, 2024 and sell it today you would lose (54.00) from holding Pacific Gas and or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Eltricas Brasileiras vs. Pacific Gas and
Performance |
| Timeline |
| Centrais Elétricas |
| Pacific Gas |
Centrais Elétricas and Pacific Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Elétricas and Pacific Gas
The main advantage of trading using opposite Centrais Elétricas and Pacific Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Elétricas position performs unexpectedly, Pacific Gas 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 Pacific Gas will offset losses from the drop in Pacific Gas' long position.| Centrais Elétricas vs. Nextera Energy | Centrais Elétricas vs. Consumers Energy | Centrais Elétricas vs. Duke Energy | Centrais Elétricas vs. Red Electrica Corporacion |
| Pacific Gas vs. Nextera Energy | Pacific Gas vs. Duke Energy | Pacific Gas vs. PGE Corp | Pacific Gas vs. Southern Company |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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