Correlation Between Centrais Electricas and NATION MEDIA
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and NATION MEDIA 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 NATION MEDIA 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 NATION MEDIA GROUP, you can compare the effects of market volatilities on Centrais Electricas and NATION MEDIA 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 NATION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and NATION MEDIA.
Diversification Opportunities for Centrais Electricas and NATION MEDIA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrais and NATION is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and NATION MEDIA GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATION MEDIA GROUP 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 NATION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATION MEDIA GROUP has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and NATION MEDIA go up and down completely randomly.
Pair Corralation between Centrais Electricas and NATION MEDIA
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to under-perform the NATION MEDIA. But the stock apears to be less risky and, when comparing its historical volatility, Centrais Electricas Brasileiras is 1.85 times less risky than NATION MEDIA. The stock trades about -0.02 of its potential returns per unit of risk. The NATION MEDIA GROUP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 27,000 in NATION MEDIA GROUP on December 11, 2024 and sell it today you would earn a total of 3,000 from holding NATION MEDIA GROUP or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.37% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. NATION MEDIA GROUP
Performance |
| Timeline |
| Centrais Electricas |
| NATION MEDIA GROUP |
Centrais Electricas and NATION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and NATION MEDIA
The main advantage of trading using opposite Centrais Electricas and NATION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, NATION MEDIA 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 NATION MEDIA will offset losses from the drop in NATION MEDIA'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 |
| NATION MEDIA vs. EAST AFRICAN BREWERIES | ||
| NATION MEDIA vs. TANZANIA BREWERIES LTD | ||
| NATION MEDIA vs. NATIONAL INVESTMENT PANY | ||
| NATION MEDIA vs. SWISSPORT TANZANIA LTD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |