Correlation Between Energisa and Legatus Shoppings
Can any of the company-specific risk be diversified away by investing in both Energisa and Legatus Shoppings 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 Legatus Shoppings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Legatus Shoppings Fundo, you can compare the effects of market volatilities on Energisa and Legatus Shoppings 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 Legatus Shoppings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Legatus Shoppings.
Diversification Opportunities for Energisa and Legatus Shoppings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energisa and Legatus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Legatus Shoppings Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legatus Shoppings 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 Legatus Shoppings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legatus Shoppings Fundo has no effect on the direction of Energisa i.e., Energisa and Legatus Shoppings go up and down completely randomly.
Pair Corralation between Energisa and Legatus Shoppings
Assuming the 90 days trading horizon Energisa is expected to generate 493.11 times less return on investment than Legatus Shoppings. But when comparing it to its historical volatility, Energisa SA is 29.15 times less risky than Legatus Shoppings. It trades about 0.01 of its potential returns per unit of risk. Legatus Shoppings Fundo is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,276 in Legatus Shoppings Fundo on September 2, 2024 and sell it today you would earn a total of 2,724 from holding Legatus Shoppings Fundo or generate 32.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.62% |
| Values | Daily Returns |
Energisa SA vs. Legatus Shoppings Fundo
Performance |
| Timeline |
| Energisa SA |
| Legatus Shoppings Fundo |
Energisa and Legatus Shoppings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Legatus Shoppings
The main advantage of trading using opposite Energisa and Legatus Shoppings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Legatus Shoppings 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 Legatus Shoppings will offset losses from the drop in Legatus Shoppings' long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Legatus Shoppings vs. Real Estate Investment | Legatus Shoppings vs. NAVI CRDITO IMOBILIRIO | Legatus Shoppings vs. LIFE CAPITAL PARTNERS | Legatus Shoppings vs. Cshg Jhsf Prime |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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