Correlation Between Centrais Electricas and Nuveen California
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and Nuveen California 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 Nuveen California 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 Nuveen California Municipal, you can compare the effects of market volatilities on Centrais Electricas and Nuveen California 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 Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Nuveen California.
Diversification Opportunities for Centrais Electricas and Nuveen California
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Centrais and Nuveen is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Nuveen California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California 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 Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and Nuveen California go up and down completely randomly.
Pair Corralation between Centrais Electricas and Nuveen California
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to generate 7.62 times more return on investment than Nuveen California. However, Centrais Electricas is 7.62 times more volatile than Nuveen California Municipal. It trades about 0.25 of its potential returns per unit of risk. Nuveen California Municipal is currently generating about -0.11 per unit of risk. If you would invest 618.00 in Centrais Electricas Brasileiras on December 8, 2024 and sell it today you would earn a total of 54.00 from holding Centrais Electricas Brasileiras or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Nuveen California Municipal
Performance |
| Timeline |
| Centrais Electricas |
| Nuveen California |
Centrais Electricas and Nuveen California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Nuveen California
The main advantage of trading using opposite Centrais Electricas and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, Nuveen California 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 Nuveen California will offset losses from the drop in Nuveen California's long position.| Centrais Electricas vs. Genie Energy | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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