Correlation Between Centrais Electricas and EDP Energias
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas 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 Centrais Electricas and EDP Energias 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 EDP Energias de, you can compare the effects of market volatilities on Centrais Electricas 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 Centrais Electricas with a short position of EDP Energias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and EDP Energias.
Diversification Opportunities for Centrais Electricas and EDP Energias
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Centrais and EDP is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and EDP Energias de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias de 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 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 de has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and EDP Energias go up and down completely randomly.
Pair Corralation between Centrais Electricas and EDP Energias
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to generate 0.87 times more return on investment than EDP Energias. However, Centrais Electricas Brasileiras is 1.15 times less risky than EDP Energias. It trades about -0.22 of its potential returns per unit of risk. EDP Energias de is currently generating about -0.19 per unit of risk. If you would invest 629.00 in Centrais Electricas Brasileiras on September 2, 2024 and sell it today you would lose (58.00) from holding Centrais Electricas Brasileiras or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. EDP Energias de
Performance |
| Timeline |
| Centrais Electricas |
| EDP Energias de |
Centrais Electricas and EDP Energias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and EDP Energias
The main advantage of trading using opposite Centrais Electricas and EDP Energias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas 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.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
| EDP Energias vs. Nextera Energy | EDP Energias vs. Consumers Energy | EDP Energias vs. Duke Energy | EDP Energias vs. Centrais Electricas Brasileiras |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |