Correlation Between Energisa and Afluente Transmisso
Can any of the company-specific risk be diversified away by investing in both Energisa and Afluente Transmisso 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 Afluente Transmisso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisa SA and Afluente Transmisso de, you can compare the effects of market volatilities on Energisa and Afluente Transmisso 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 Afluente Transmisso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Afluente Transmisso.
Diversification Opportunities for Energisa and Afluente Transmisso
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Energisa and Afluente is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and Afluente Transmisso de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afluente Transmisso 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 Afluente Transmisso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afluente Transmisso has no effect on the direction of Energisa i.e., Energisa and Afluente Transmisso go up and down completely randomly.
Pair Corralation between Energisa and Afluente Transmisso
Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Afluente Transmisso. In addition to that, Energisa is 1.21 times more volatile than Afluente Transmisso de. It trades about -0.04 of its total potential returns per unit of risk. Afluente Transmisso de is currently generating about -0.03 per unit of volatility. If you would invest 840.00 in Afluente Transmisso de on August 29, 2024 and sell it today you would lose (161.00) from holding Afluente Transmisso de or give up 19.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Energisa SA vs. Afluente Transmisso de
Performance |
| Timeline |
| Energisa SA |
| Afluente Transmisso |
Energisa and Afluente Transmisso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisa and Afluente Transmisso
The main advantage of trading using opposite Energisa and Afluente Transmisso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisa position performs unexpectedly, Afluente Transmisso 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 Afluente Transmisso will offset losses from the drop in Afluente Transmisso's long position.| Energisa vs. Equatorial Energia SA | Energisa vs. Energisa SA | Energisa vs. Transmissora Aliana de | Energisa vs. CTEEP Companhia |
| Afluente Transmisso vs. BB Seguridade Participacoes | Afluente Transmisso vs. Engie Brasil Energia | Afluente Transmisso vs. CTEEP Companhia | Afluente Transmisso vs. Itasa Investimentos |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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