Correlation Between Energisa and Hedge Logistica
Can any of the company-specific risk be diversified away by investing in both Energisa and Hedge Logistica 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 Hedge Logistica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Hedge Logistica Fundo, you can compare the effects of market volatilities on Energisa and Hedge Logistica 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 Hedge Logistica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Hedge Logistica.
Diversification Opportunities for Energisa and Hedge Logistica
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Energisa and Hedge is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Hedge Logistica Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedge Logistica Fundo 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 Hedge Logistica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedge Logistica Fundo has no effect on the direction of Energisa i.e., Energisa and Hedge Logistica go up and down completely randomly.
Pair Corralation between Energisa and Hedge Logistica
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Hedge Logistica. In addition to that, Energisa is 3.2 times more volatile than Hedge Logistica Fundo. It trades about -0.15 of its total potential returns per unit of risk. Hedge Logistica Fundo is currently generating about -0.14 per unit of volatility. If you would invest 8,478 in Hedge Logistica Fundo on August 31, 2024 and sell it today you would lose (223.00) from holding Hedge Logistica Fundo or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Hedge Logistica Fundo
Performance |
| Timeline |
| Energisa SA |
| Hedge Logistica Fundo |
Energisa and Hedge Logistica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Hedge Logistica
The main advantage of trading using opposite Energisa and Hedge Logistica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Hedge Logistica 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 Hedge Logistica will offset losses from the drop in Hedge Logistica's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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