Correlation Between Energisa and Moderna
Can any of the company-specific risk be diversified away by investing in both Energisa and Moderna 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 Moderna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Moderna, you can compare the effects of market volatilities on Energisa and Moderna 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 Moderna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Moderna.
Diversification Opportunities for Energisa and Moderna
Very good diversification
The 3 months correlation between Energisa and Moderna is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Energisa i.e., Energisa and Moderna go up and down completely randomly.
Pair Corralation between Energisa and Moderna
Assuming the 90 days trading horizon Energisa SA is expected to generate 0.45 times more return on investment than Moderna. However, Energisa SA is 2.24 times less risky than Moderna. It trades about 0.11 of its potential returns per unit of risk. Moderna is currently generating about -0.27 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Energisa SA vs. Moderna
Performance |
| Timeline |
| Energisa SA |
| Moderna |
Energisa and Moderna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Moderna
The main advantage of trading using opposite Energisa and Moderna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Moderna 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 Moderna will offset losses from the drop in Moderna's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Moderna vs. ICICI Bank Limited | Moderna vs. ON Semiconductor | Moderna vs. Synchrony Financial | Moderna vs. Melco Resorts Entertainment |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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