Correlation Between Centrais Eltricas and Eneva SA
Can any of the company-specific risk be diversified away by investing in both Centrais Eltricas and Eneva SA 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 Eltricas and Eneva SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Eltricas Brasileiras and Eneva SA, you can compare the effects of market volatilities on Centrais Eltricas and Eneva SA 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 Eltricas with a short position of Eneva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Eltricas and Eneva SA.
Diversification Opportunities for Centrais Eltricas and Eneva SA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrais and Eneva is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Eltricas Brasileiras and Eneva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneva SA and Centrais Eltricas 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 Eltricas Brasileiras are associated (or correlated) with Eneva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneva SA has no effect on the direction of Centrais Eltricas i.e., Centrais Eltricas and Eneva SA go up and down completely randomly.
Pair Corralation between Centrais Eltricas and Eneva SA
Assuming the 90 days trading horizon Centrais Eltricas Brasileiras is expected to under-perform the Eneva SA. But the preferred stock apears to be less risky and, when comparing its historical volatility, Centrais Eltricas Brasileiras is 1.23 times less risky than Eneva SA. The preferred stock trades about -0.21 of its potential returns per unit of risk. The Eneva SA is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 1,362 in Eneva SA on August 28, 2024 and sell it today you would lose (167.00) from holding Eneva SA or give up 12.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Centrais Eltricas Brasileiras vs. Eneva SA
Performance |
Timeline |
Centrais Eltricas |
Eneva SA |
Centrais Eltricas and Eneva SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Centrais Eltricas and Eneva SA
The main advantage of trading using opposite Centrais Eltricas and Eneva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Eltricas position performs unexpectedly, Eneva SA 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 Eneva SA will offset losses from the drop in Eneva SA's long position.Centrais Eltricas vs. CTEEP Companhia | Centrais Eltricas vs. BB Seguridade Participacoes | Centrais Eltricas vs. Transmissora Aliana de | Centrais Eltricas vs. Itasa Investimentos |
Eneva SA vs. BB Seguridade Participacoes | Eneva SA vs. Engie Brasil Energia | Eneva SA vs. CTEEP Companhia | Eneva SA vs. Itasa Investimentos |
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.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
CEOs Directory Screen CEOs from public companies around the world | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |