Correlation Between Energisa and Caixa Seguridade
Can any of the company-specific risk be diversified away by investing in both Energisa and Caixa Seguridade 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 Caixa Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Caixa Seguridade Participaes, you can compare the effects of market volatilities on Energisa and Caixa Seguridade 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 Caixa Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Caixa Seguridade.
Diversification Opportunities for Energisa and Caixa Seguridade
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energisa and Caixa is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Caixa Seguridade Participaes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caixa Seguridade Par 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 Caixa Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caixa Seguridade Par has no effect on the direction of Energisa i.e., Energisa and Caixa Seguridade go up and down completely randomly.
Pair Corralation between Energisa and Caixa Seguridade
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Caixa Seguridade. But the stock apears to be less risky and, when comparing its historical volatility, Energisa SA is 1.13 times less risky than Caixa Seguridade. The stock trades about -0.05 of its potential returns per unit of risk. The Caixa Seguridade Participaes is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,069 in Caixa Seguridade Participaes on August 29, 2024 and sell it today you would earn a total of 428.00 from holding Caixa Seguridade Participaes or generate 40.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Energisa SA vs. Caixa Seguridade Participaes
Performance |
| Timeline |
| Energisa SA |
| Caixa Seguridade Par |
Energisa and Caixa Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Caixa Seguridade
The main advantage of trading using opposite Energisa and Caixa Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Caixa Seguridade 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 Caixa Seguridade will offset losses from the drop in Caixa Seguridade's long position.| Energisa vs. Centrais Eltricas Brasileiras | Energisa vs. Companhia Energtica de | Energisa vs. Companhia de Saneamento | Energisa vs. Companhia Siderrgica Nacional |
| Caixa Seguridade vs. Porto Seguro SA | Caixa Seguridade vs. Energisa SA | Caixa Seguridade vs. BTG Pactual Logstica | Caixa Seguridade vs. Plano Plano Desenvolvimento |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |