Correlation Between Energisa and EXES FUNDO
Can any of the company-specific risk be diversified away by investing in both Energisa and EXES FUNDO 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 EXES FUNDO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and EXES FUNDO DE, you can compare the effects of market volatilities on Energisa and EXES FUNDO 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 EXES FUNDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and EXES FUNDO.
Diversification Opportunities for Energisa and EXES FUNDO
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energisa and EXES is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and EXES FUNDO DE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXES FUNDO DE 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 EXES FUNDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXES FUNDO DE has no effect on the direction of Energisa i.e., Energisa and EXES FUNDO go up and down completely randomly.
Pair Corralation between Energisa and EXES FUNDO
Assuming the 90 days trading horizon Energisa SA is expected to generate 2.88 times more return on investment than EXES FUNDO. However, Energisa is 2.88 times more volatile than EXES FUNDO DE. It trades about 0.22 of its potential returns per unit of risk. EXES FUNDO DE is currently generating about 0.01 per unit of risk. If you would invest 3,605 in Energisa SA on November 3, 2024 and sell it today you would earn a total of 361.00 from holding Energisa SA or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. EXES FUNDO DE
Performance |
| Timeline |
| Energisa SA |
| EXES FUNDO DE |
Energisa and EXES FUNDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and EXES FUNDO
The main advantage of trading using opposite Energisa and EXES FUNDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, EXES FUNDO 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 EXES FUNDO will offset losses from the drop in EXES FUNDO's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| EXES FUNDO vs. Domo Fundo de | EXES FUNDO vs. Aesapar Fundo de | EXES FUNDO vs. FUNDO DE INVESTIMENTO | EXES FUNDO vs. Ourinvest Jpp Fundo |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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