Correlation Between Energisa and Ser Educacional
Can any of the company-specific risk be diversified away by investing in both Energisa and Ser Educacional 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 Ser Educacional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Ser Educacional Sa, you can compare the effects of market volatilities on Energisa and Ser Educacional 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 Ser Educacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Ser Educacional.
Diversification Opportunities for Energisa and Ser Educacional
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energisa and Ser is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Ser Educacional Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ser Educacional Sa 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 Ser Educacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ser Educacional Sa has no effect on the direction of Energisa i.e., Energisa and Ser Educacional go up and down completely randomly.
Pair Corralation between Energisa and Ser Educacional
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Ser Educacional. But the stock apears to be less risky and, when comparing its historical volatility, Energisa SA is 2.77 times less risky than Ser Educacional. The stock trades about -0.17 of its potential returns per unit of risk. The Ser Educacional Sa is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 654.00 in Ser Educacional Sa on September 2, 2024 and sell it today you would lose (39.00) from holding Ser Educacional Sa or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. Ser Educacional Sa
Performance |
| Timeline |
| Energisa SA |
| Ser Educacional Sa |
Energisa and Ser Educacional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Ser Educacional
The main advantage of trading using opposite Energisa and Ser Educacional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Ser Educacional 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 Ser Educacional will offset losses from the drop in Ser Educacional's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| Ser Educacional vs. Engie Brasil Energia | Ser Educacional vs. Fras le SA | Ser Educacional vs. Energisa SA | Ser Educacional vs. Clave Indices De |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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