Correlation Between Energisa and Illumina
Can any of the company-specific risk be diversified away by investing in both Energisa and Illumina 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 Illumina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Illumina, you can compare the effects of market volatilities on Energisa and Illumina 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 Illumina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Illumina.
Diversification Opportunities for Energisa and Illumina
Pay attention - limited upside
The 3 months correlation between Energisa and Illumina is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Illumina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illumina 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 Illumina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illumina has no effect on the direction of Energisa i.e., Energisa and Illumina go up and down completely randomly.
Pair Corralation between Energisa and Illumina
Assuming the 90 days trading horizon Energisa SA is expected to generate 0.74 times more return on investment than Illumina. However, Energisa SA is 1.35 times less risky than Illumina. It trades about 0.0 of its potential returns per unit of risk. Illumina is currently generating about 0.0 per unit of risk. If you would invest 4,176 in Energisa SA on September 14, 2024 and sell it today you would lose (267.00) from holding Energisa SA or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Energisa SA vs. Illumina
Performance |
| Timeline |
| Energisa SA |
| Illumina |
Energisa and Illumina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Illumina
The main advantage of trading using opposite Energisa and Illumina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Illumina 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 Illumina will offset losses from the drop in Illumina's long position.| Energisa vs. Transmissora Aliana de | Energisa vs. CTEEP Companhia | Energisa vs. Companhia Paranaense de | Energisa vs. Companhia Energtica de |
| Illumina vs. CTEEP Companhia | Illumina vs. Cosan SA | Illumina vs. Telefnica Brasil SA | Illumina vs. Energisa 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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