Correlation Between Electricite and Companhia Energetica
Can any of the company-specific risk be diversified away by investing in both Electricite and Companhia Energetica 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 Electricite and Companhia Energetica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electricite De France and Companhia Energetica de, you can compare the effects of market volatilities on Electricite and Companhia Energetica 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 Electricite with a short position of Companhia Energetica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electricite and Companhia Energetica.
Diversification Opportunities for Electricite and Companhia Energetica
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electricite and Companhia is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Electricite De France and Companhia Energetica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energetica and Electricite 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 Electricite De France are associated (or correlated) with Companhia Energetica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energetica has no effect on the direction of Electricite i.e., Electricite and Companhia Energetica go up and down completely randomly.
Pair Corralation between Electricite and Companhia Energetica
If you would invest 193.00 in Companhia Energetica de on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Companhia Energetica de or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Electricite De France vs. Companhia Energetica de
Performance |
| Timeline |
| Electricite De France |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Companhia Energetica |
Electricite and Companhia Energetica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electricite and Companhia Energetica
The main advantage of trading using opposite Electricite and Companhia Energetica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electricite position performs unexpectedly, Companhia Energetica 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 Companhia Energetica will offset losses from the drop in Companhia Energetica's long position.| Electricite vs. RWE AG PK | Electricite vs. ENEL Societa per | Electricite vs. Companhia Paranaense de | Electricite vs. Iberdrola SA |
| Companhia Energetica vs. NorthWestern | Companhia Energetica vs. Montauk Renewables | Companhia Energetica vs. Allete Inc | Companhia Energetica vs. Companhia Paranaense de |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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