Correlation Between Centrais Electricas and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and BB Seguridade 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 Electricas and BB Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and BB Seguridade Participacoes, you can compare the effects of market volatilities on Centrais Electricas and BB Seguridade 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 Electricas with a short position of BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and BB Seguridade.
Diversification Opportunities for Centrais Electricas and BB Seguridade
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centrais and BBSEY is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic and Centrais Electricas 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 Electricas Brasileiras are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and BB Seguridade go up and down completely randomly.
Pair Corralation between Centrais Electricas and BB Seguridade
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to under-perform the BB Seguridade. In addition to that, Centrais Electricas is 1.32 times more volatile than BB Seguridade Participacoes. It trades about -0.06 of its total potential returns per unit of risk. BB Seguridade Participacoes is currently generating about -0.03 per unit of volatility. If you would invest 646.00 in BB Seguridade Participacoes on August 28, 2024 and sell it today you would lose (76.00) from holding BB Seguridade Participacoes or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. BB Seguridade Participacoes
Performance |
| Timeline |
| Centrais Electricas |
| BB Seguridade Partic |
Centrais Electricas and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and BB Seguridade
The main advantage of trading using opposite Centrais Electricas and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
| BB Seguridade vs. Assicurazioni Generali SpA | BB Seguridade vs. Athene Holding | BB Seguridade vs. ageas SANV | BB Seguridade vs. Athene Holding |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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