Correlation Between Engie Brasil and Dominion Energy
Can any of the company-specific risk be diversified away by investing in both Engie Brasil and Dominion Energy 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 Dominion Energy 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 Dominion Energy, you can compare the effects of market volatilities on Engie Brasil and Dominion Energy 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 Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engie Brasil and Dominion Energy.
Diversification Opportunities for Engie Brasil and Dominion Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Engie and Dominion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Engie Brasil Energia and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy 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 Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of Engie Brasil i.e., Engie Brasil and Dominion Energy go up and down completely randomly.
Pair Corralation between Engie Brasil and Dominion Energy
Assuming the 90 days horizon Engie Brasil Energia is expected to generate 0.92 times more return on investment than Dominion Energy. However, Engie Brasil Energia is 1.09 times less risky than Dominion Energy. It trades about 0.4 of its potential returns per unit of risk. Dominion Energy is currently generating about 0.05 per unit of risk. If you would invest 567.00 in Engie Brasil Energia on November 4, 2024 and sell it today you would earn a total of 83.00 from holding Engie Brasil Energia or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Engie Brasil Energia vs. Dominion Energy
Performance |
| Timeline |
| Engie Brasil Energia |
| Dominion Energy |
Engie Brasil and Dominion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engie Brasil and Dominion Energy
The main advantage of trading using opposite Engie Brasil and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie Brasil position performs unexpectedly, Dominion Energy 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.| Engie Brasil vs. Red Electrica Corporacion | Engie Brasil vs. Centrais Eltricas Brasileiras | Engie Brasil vs. Centrais Electricas Brasileiras | Engie Brasil vs. Enel Chile SA |
| Dominion Energy vs. Southern Company | Dominion Energy vs. American Electric Power | Dominion Energy vs. Nextera Energy | Dominion Energy vs. Consolidated Edison |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |