Correlation Between Energisa and CAIXA ETF
Can any of the company-specific risk be diversified away by investing in both Energisa and CAIXA ETF 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 CAIXA ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and CAIXA ETF Ibovespa, you can compare the effects of market volatilities on Energisa and CAIXA ETF 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 CAIXA ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and CAIXA ETF.
Diversification Opportunities for Energisa and CAIXA ETF
Almost no diversification
The 3 months correlation between Energisa and CAIXA is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and CAIXA ETF Ibovespa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAIXA ETF Ibovespa 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 CAIXA ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAIXA ETF Ibovespa has no effect on the direction of Energisa i.e., Energisa and CAIXA ETF go up and down completely randomly.
Pair Corralation between Energisa and CAIXA ETF
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the CAIXA ETF. In addition to that, Energisa is 1.92 times more volatile than CAIXA ETF Ibovespa. It trades about -0.25 of its total potential returns per unit of risk. CAIXA ETF Ibovespa is currently generating about -0.21 per unit of volatility. If you would invest 12,783 in CAIXA ETF Ibovespa on September 4, 2024 and sell it today you would lose (500.00) from holding CAIXA ETF Ibovespa or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energisa SA vs. CAIXA ETF Ibovespa
Performance |
| Timeline |
| Energisa SA |
| CAIXA ETF Ibovespa |
Energisa and CAIXA ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and CAIXA ETF
The main advantage of trading using opposite Energisa and CAIXA ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, CAIXA ETF 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 CAIXA ETF will offset losses from the drop in CAIXA ETF's long position.| Energisa vs. Transmissora Aliana de | Energisa vs. CTEEP Companhia | Energisa vs. Companhia Paranaense de | Energisa vs. Companhia Energtica de |
| CAIXA ETF vs. RB Capital Office | CAIXA ETF vs. Ishares Msci Brazil | CAIXA ETF vs. Investo Etf Global | CAIXA ETF vs. iShares BMFBovespa Small |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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