Correlation Between Energisa and Baumer SA
Can any of the company-specific risk be diversified away by investing in both Energisa and Baumer 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 Energisa and Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Baumer SA, you can compare the effects of market volatilities on Energisa and Baumer 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 Energisa with a short position of Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Baumer SA.
Diversification Opportunities for Energisa and Baumer SA
Very good diversification
The 3 months correlation between Energisa and Baumer is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and Energisa 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 Energisa SA are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Energisa i.e., Energisa and Baumer SA go up and down completely randomly.
Pair Corralation between Energisa and Baumer SA
Assuming the 90 days trading horizon Energisa is expected to generate 3.66 times less return on investment than Baumer SA. But when comparing it to its historical volatility, Energisa SA is 1.73 times less risky than Baumer SA. It trades about 0.01 of its potential returns per unit of risk. Baumer SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,088 in Baumer SA on August 30, 2024 and sell it today you would earn a total of 200.00 from holding Baumer SA or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Energisa SA vs. Baumer SA
Performance |
| Timeline |
| Energisa SA |
| Baumer SA |
Energisa and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Baumer SA
The main advantage of trading using opposite Energisa and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Baumer 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 Baumer SA will offset losses from the drop in Baumer SA's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Baumer SA vs. Fleury SA | Baumer SA vs. Baumer SA | Baumer SA vs. Energisa SA | Baumer SA vs. BTG Pactual Logstica |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |