Correlation Between Centrais Eltricas and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both Centrais Eltricas and Hospital Mater 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 Hospital Mater 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 Hospital Mater Dei, you can compare the effects of market volatilities on Centrais Eltricas and Hospital Mater 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 Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Eltricas and Hospital Mater.
Diversification Opportunities for Centrais Eltricas and Hospital Mater
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Centrais and Hospital is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Eltricas Brasileiras and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei 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 Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of Centrais Eltricas i.e., Centrais Eltricas and Hospital Mater go up and down completely randomly.
Pair Corralation between Centrais Eltricas and Hospital Mater
Assuming the 90 days trading horizon Centrais Eltricas Brasileiras is expected to generate 0.54 times more return on investment than Hospital Mater. However, Centrais Eltricas Brasileiras is 1.87 times less risky than Hospital Mater. It trades about 0.14 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about 0.01 per unit of risk. If you would invest 3,986 in Centrais Eltricas Brasileiras on November 28, 2024 and sell it today you would earn a total of 190.00 from holding Centrais Eltricas Brasileiras or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Eltricas Brasileiras vs. Hospital Mater Dei
Performance |
| Timeline |
| Centrais Eltricas |
| Hospital Mater Dei |
Centrais Eltricas and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Eltricas and Hospital Mater
The main advantage of trading using opposite Centrais Eltricas and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Eltricas position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater's long position.| Centrais Eltricas vs. Centrais Eltricas Brasileiras | Centrais Eltricas vs. Companhia Energtica de | Centrais Eltricas vs. Companhia Paranaense de | Centrais Eltricas vs. Companhia de Saneamento |
| Hospital Mater vs. Microchip Technology Incorporated | Hospital Mater vs. Spotify Technology SA | Hospital Mater vs. Metalurgica Gerdau SA | Hospital Mater vs. Taiwan Semiconductor Manufacturing |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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