Correlation Between Eneva SA and Companhia
Can any of the company-specific risk be diversified away by investing in both Eneva SA and Companhia 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 Eneva SA and Companhia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eneva SA and Companhia de Gs, you can compare the effects of market volatilities on Eneva SA and Companhia 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 Eneva SA with a short position of Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eneva SA and Companhia.
Diversification Opportunities for Eneva SA and Companhia
Very poor diversification
The 3 months correlation between Eneva and Companhia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eneva SA and Companhia de Gs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Gs and Eneva SA 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 Eneva SA are associated (or correlated) with Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Gs has no effect on the direction of Eneva SA i.e., Eneva SA and Companhia go up and down completely randomly.
Pair Corralation between Eneva SA and Companhia
Assuming the 90 days trading horizon Eneva SA is expected to generate 1.37 times more return on investment than Companhia. However, Eneva SA is 1.37 times more volatile than Companhia de Gs. It trades about 0.21 of its potential returns per unit of risk. Companhia de Gs is currently generating about 0.03 per unit of risk. If you would invest 1,127 in Eneva SA on November 28, 2024 and sell it today you would earn a total of 94.00 from holding Eneva SA or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eneva SA vs. Companhia de Gs
Performance |
| Timeline |
| Eneva SA |
| Companhia de Gs |
Eneva SA and Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eneva SA and Companhia
The main advantage of trading using opposite Eneva SA and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eneva SA position performs unexpectedly, Companhia 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 Companhia will offset losses from the drop in Companhia's long position.| Eneva SA vs. Banco BTG Pactual | Eneva SA vs. Cosan SA | Eneva SA vs. Banco Pan SA | Eneva SA vs. Equatorial Energia SA |
| Companhia vs. Companhia de Saneamento | Companhia vs. Centrais Eltricas Brasileiras | Companhia vs. Bradespar SA | Companhia vs. Braskem SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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