Correlation Between Energisa and Telefonaktiebolaget
Can any of the company-specific risk be diversified away by investing in both Energisa and Telefonaktiebolaget 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 Telefonaktiebolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on Energisa and Telefonaktiebolaget 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 Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Telefonaktiebolaget.
Diversification Opportunities for Energisa and Telefonaktiebolaget
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energisa and Telefonaktiebolaget is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget 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 Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of Energisa i.e., Energisa and Telefonaktiebolaget go up and down completely randomly.
Pair Corralation between Energisa and Telefonaktiebolaget
Assuming the 90 days trading horizon Energisa SA is expected to generate 1.15 times more return on investment than Telefonaktiebolaget. However, Energisa is 1.15 times more volatile than Telefonaktiebolaget LM Ericsson. It trades about -0.05 of its potential returns per unit of risk. Telefonaktiebolaget LM Ericsson is currently generating about -0.16 per unit of risk. If you would invest 4,289 in Energisa SA on August 27, 2024 and sell it today you would lose (92.00) from holding Energisa SA or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Telefonaktiebolaget LM Ericsso
Performance |
| Timeline |
| Energisa SA |
| Telefonaktiebolaget |
Energisa and Telefonaktiebolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Telefonaktiebolaget
The main advantage of trading using opposite Energisa and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Telefonaktiebolaget 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 Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.| Energisa vs. Centrais Eltricas Brasileiras | Energisa vs. Companhia Energtica de | Energisa vs. Companhia de Saneamento | Energisa vs. Companhia Siderrgica Nacional |
| Telefonaktiebolaget vs. Verizon Communications | Telefonaktiebolaget vs. Lloyds Banking Group | Telefonaktiebolaget vs. Costco Wholesale | Telefonaktiebolaget vs. HDFC Bank Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |