Correlation Between Empresa Metropolitana and Centrais Eltricas
Can any of the company-specific risk be diversified away by investing in both Empresa Metropolitana and Centrais Eltricas 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 Empresa Metropolitana and Centrais Eltricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empresa Metropolitana de and Centrais Eltricas Brasileiras, you can compare the effects of market volatilities on Empresa Metropolitana and Centrais Eltricas 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 Empresa Metropolitana with a short position of Centrais Eltricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Metropolitana and Centrais Eltricas.
Diversification Opportunities for Empresa Metropolitana and Centrais Eltricas
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empresa and Centrais is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Metropolitana de and Centrais Eltricas Brasileiras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Eltricas and Empresa Metropolitana 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 Empresa Metropolitana de are associated (or correlated) with Centrais Eltricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Eltricas has no effect on the direction of Empresa Metropolitana i.e., Empresa Metropolitana and Centrais Eltricas go up and down completely randomly.
Pair Corralation between Empresa Metropolitana and Centrais Eltricas
Assuming the 90 days trading horizon Empresa Metropolitana de is expected to under-perform the Centrais Eltricas. In addition to that, Empresa Metropolitana is 3.67 times more volatile than Centrais Eltricas Brasileiras. It trades about -0.02 of its total potential returns per unit of risk. Centrais Eltricas Brasileiras is currently generating about 0.02 per unit of volatility. If you would invest 8,601 in Centrais Eltricas Brasileiras on September 12, 2024 and sell it today you would earn a total of 399.00 from holding Centrais Eltricas Brasileiras or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Empresa Metropolitana de vs. Centrais Eltricas Brasileiras
Performance |
| Timeline |
| Empresa Metropolitana |
| Centrais Eltricas |
Empresa Metropolitana and Centrais Eltricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empresa Metropolitana and Centrais Eltricas
The main advantage of trading using opposite Empresa Metropolitana and Centrais Eltricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Metropolitana position performs unexpectedly, Centrais Eltricas 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 Centrais Eltricas will offset losses from the drop in Centrais Eltricas' long position.| Empresa Metropolitana vs. Companhia Energtica do | Empresa Metropolitana vs. CTEEP Companhia | Empresa Metropolitana vs. Companhia de Gs | Empresa Metropolitana vs. Companhia Paranaense de |
| Centrais Eltricas vs. Companhia Energtica de | Centrais Eltricas vs. Companhia Energtica de | Centrais Eltricas vs. Empresa Metropolitana de | Centrais Eltricas vs. Companhiade Eletricidade do |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |