Correlation Between Energisa and Guararapes Confeces
Can any of the company-specific risk be diversified away by investing in both Energisa and Guararapes Confeces 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 Guararapes Confeces into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Guararapes Confeces SA, you can compare the effects of market volatilities on Energisa and Guararapes Confeces 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 Guararapes Confeces. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Guararapes Confeces.
Diversification Opportunities for Energisa and Guararapes Confeces
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energisa and Guararapes is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Guararapes Confeces SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guararapes Confeces 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 Guararapes Confeces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guararapes Confeces has no effect on the direction of Energisa i.e., Energisa and Guararapes Confeces go up and down completely randomly.
Pair Corralation between Energisa and Guararapes Confeces
Assuming the 90 days trading horizon Energisa SA is expected to generate 0.55 times more return on investment than Guararapes Confeces. However, Energisa SA is 1.81 times less risky than Guararapes Confeces. It trades about 0.11 of its potential returns per unit of risk. Guararapes Confeces SA is currently generating about -0.06 per unit of risk. If you would invest 3,884 in Energisa SA on November 29, 2024 and sell it today you would earn a total of 167.00 from holding Energisa SA or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Energisa SA vs. Guararapes Confeces SA
Performance |
| Timeline |
| Energisa SA |
| Guararapes Confeces |
Energisa and Guararapes Confeces Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Guararapes Confeces
The main advantage of trading using opposite Energisa and Guararapes Confeces positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Guararapes Confeces 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 Guararapes Confeces will offset losses from the drop in Guararapes Confeces' long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Guararapes Confeces vs. Lojas Renner SA | Guararapes Confeces vs. Marisa Lojas SA | Guararapes Confeces vs. Vulcabras Azaleia SA | Guararapes Confeces vs. Alpargatas 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |