Correlation Between Energisa and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Energisa and CM Hospitalar 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 CM Hospitalar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and CM Hospitalar SA, you can compare the effects of market volatilities on Energisa and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and CM Hospitalar.
Diversification Opportunities for Energisa and CM Hospitalar
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energisa and VVEO3 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Energisa i.e., Energisa and CM Hospitalar go up and down completely randomly.
Pair Corralation between Energisa and CM Hospitalar
Assuming the 90 days trading horizon Energisa SA is expected to generate 0.56 times more return on investment than CM Hospitalar. However, Energisa SA is 1.79 times less risky than CM Hospitalar. It trades about 0.25 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.25 per unit of risk. If you would invest 3,560 in Energisa SA on November 4, 2024 and sell it today you would earn a total of 406.00 from holding Energisa SA or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. CM Hospitalar SA
Performance |
| Timeline |
| Energisa SA |
| CM Hospitalar SA |
Energisa and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and CM Hospitalar
The main advantage of trading using opposite Energisa and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| CM Hospitalar vs. Fidelity National Information | CM Hospitalar vs. Medical Properties Trust, | CM Hospitalar vs. Extra Space Storage | CM Hospitalar vs. Fresenius Medical Care |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |