Correlation Between Centrais Electricas and Via Renewables
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on Centrais Electricas and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Via Renewables.
Diversification Opportunities for Centrais Electricas and Via Renewables
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Centrais and Via is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and Via Renewables go up and down completely randomly.
Pair Corralation between Centrais Electricas and Via Renewables
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to generate 2.35 times more return on investment than Via Renewables. However, Centrais Electricas is 2.35 times more volatile than Via Renewables. It trades about 0.36 of its potential returns per unit of risk. Via Renewables is currently generating about 0.07 per unit of risk. If you would invest 579.00 in Centrais Electricas Brasileiras on November 18, 2024 and sell it today you would earn a total of 79.00 from holding Centrais Electricas Brasileiras or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Via Renewables
Performance |
| Timeline |
| Centrais Electricas |
| Via Renewables |
Centrais Electricas and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Via Renewables
The main advantage of trading using opposite Centrais Electricas and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' 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 |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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