Correlation Between Energisa and WHG REAL
Can any of the company-specific risk be diversified away by investing in both Energisa and WHG REAL 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 WHG REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and WHG REAL ESTATE, you can compare the effects of market volatilities on Energisa and WHG REAL 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 WHG REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and WHG REAL.
Diversification Opportunities for Energisa and WHG REAL
Very poor diversification
The 3 months correlation between Energisa and WHG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and WHG REAL ESTATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHG REAL ESTATE 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 WHG REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHG REAL ESTATE has no effect on the direction of Energisa i.e., Energisa and WHG REAL go up and down completely randomly.
Pair Corralation between Energisa and WHG REAL
Assuming the 90 days trading horizon Energisa is expected to generate 1.94 times less return on investment than WHG REAL. In addition to that, Energisa is 2.04 times more volatile than WHG REAL ESTATE. It trades about 0.01 of its total potential returns per unit of risk. WHG REAL ESTATE is currently generating about 0.03 per unit of volatility. If you would invest 793.00 in WHG REAL ESTATE on September 5, 2024 and sell it today you would earn a total of 101.00 from holding WHG REAL ESTATE or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Energisa SA vs. WHG REAL ESTATE
Performance |
| Timeline |
| Energisa SA |
| WHG REAL ESTATE |
Energisa and WHG REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and WHG REAL
The main advantage of trading using opposite Energisa and WHG REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, WHG REAL 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 WHG REAL will offset losses from the drop in WHG REAL's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
| WHG REAL vs. Energisa SA | WHG REAL vs. BTG Pactual Logstica | WHG REAL vs. Plano Plano Desenvolvimento | WHG REAL vs. Companhia Habitasul 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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