Correlation Between Energisa and Hedge Real
Can any of the company-specific risk be diversified away by investing in both Energisa and Hedge Real 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 Real 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 Real Estate, you can compare the effects of market volatilities on Energisa and Hedge Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Hedge Real.
Diversification Opportunities for Energisa and Hedge Real
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energisa and Hedge is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Hedge Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedge Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedge Real Estate has no effect on the direction of Energisa i.e., Energisa and Hedge Real go up and down completely randomly.
Pair Corralation between Energisa and Hedge Real
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Hedge Real. In addition to that, Energisa is 1.27 times more volatile than Hedge Real Estate. It trades about -0.17 of its total potential returns per unit of risk. Hedge Real Estate is currently generating about -0.01 per unit of volatility. If you would invest 8,949 in Hedge Real Estate on September 2, 2024 and sell it today you would lose (70.00) from holding Hedge Real Estate or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Hedge Real Estate
Performance |
| Timeline |
| Energisa SA |
| Hedge Real Estate |
Energisa and Hedge Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Hedge Real
The main advantage of trading using opposite Energisa and Hedge Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Hedge Real 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 Real will offset losses from the drop in Hedge Real's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Hedge Real vs. Real Estate Investment | Hedge Real vs. Trx Real Estate | Hedge Real vs. ZAVIT REAL ESTATE | Hedge Real vs. WHG REAL ESTATE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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