Correlation Between Centrais Electricas and FCF Advisors

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Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and FCF Advisors 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 FCF Advisors 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 FCF Advisors, you can compare the effects of market volatilities on Centrais Electricas and FCF Advisors 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 FCF Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and FCF Advisors.

Diversification Opportunities for Centrais Electricas and FCF Advisors

CentraisFCFDiversified AwayCentraisFCFDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Centrais and FCF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and FCF Advisors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FCF Advisors 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 FCF Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FCF Advisors has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and FCF Advisors go up and down completely randomly.

Pair Corralation between Centrais Electricas and FCF Advisors

If you would invest  683.00  in Centrais Electricas Brasileiras on December 4, 2024 and sell it today you would lose (36.50) from holding Centrais Electricas Brasileiras or give up 5.34% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Centrais Electricas Brasileira  vs.  FCF Advisors

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15EBR TTAI
       Timeline  
Centrais Electricas 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Centrais Electricas Brasileiras are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Centrais Electricas reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar5.45.65.866.26.46.66.8
FCF Advisors 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days FCF Advisors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, FCF Advisors is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Centrais Electricas and FCF Advisors Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.59-4.94-3.28-1.630.01.723.455.176.89 0.020.040.060.08
JavaScript chart by amCharts 3.21.15EBR TTAI
       Returns  

Pair Trading with Centrais Electricas and FCF Advisors

The main advantage of trading using opposite Centrais Electricas and FCF Advisors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, FCF Advisors 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 FCF Advisors will offset losses from the drop in FCF Advisors' long position.
The idea behind Centrais Electricas Brasileiras and FCF Advisors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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