Correlation Between Engie Brasil and Springs Global
Can any of the company-specific risk be diversified away by investing in both Engie Brasil and Springs Global 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 Engie Brasil and Springs Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Engie Brasil Energia and Springs Global Participaes, you can compare the effects of market volatilities on Engie Brasil and Springs Global 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 Engie Brasil with a short position of Springs Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engie Brasil and Springs Global.
Diversification Opportunities for Engie Brasil and Springs Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Engie and Springs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Engie Brasil Energia and Springs Global Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Springs Global Parti and Engie Brasil 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 Engie Brasil Energia are associated (or correlated) with Springs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Springs Global Parti has no effect on the direction of Engie Brasil i.e., Engie Brasil and Springs Global go up and down completely randomly.
Pair Corralation between Engie Brasil and Springs Global
Assuming the 90 days trading horizon Engie Brasil Energia is expected to generate 0.25 times more return on investment than Springs Global. However, Engie Brasil Energia is 3.98 times less risky than Springs Global. It trades about -0.1 of its potential returns per unit of risk. Springs Global Participaes is currently generating about -0.04 per unit of risk. If you would invest 4,272 in Engie Brasil Energia on September 3, 2024 and sell it today you would lose (536.00) from holding Engie Brasil Energia or give up 12.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Engie Brasil Energia vs. Springs Global Participaes
Performance |
| Timeline |
| Engie Brasil Energia |
| Springs Global Parti |
Engie Brasil and Springs Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engie Brasil and Springs Global
The main advantage of trading using opposite Engie Brasil and Springs Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie Brasil position performs unexpectedly, Springs Global 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 Springs Global will offset losses from the drop in Springs Global's long position.| Engie Brasil vs. WEG SA | Engie Brasil vs. Transmissora Aliana de | Engie Brasil vs. Fleury SA | Engie Brasil vs. BB Seguridade Participacoes |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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