Correlation Between Equatorial Energia and CCR SA
Can any of the company-specific risk be diversified away by investing in both Equatorial Energia and CCR SA 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 Equatorial Energia and CCR SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equatorial Energia SA and CCR SA, you can compare the effects of market volatilities on Equatorial Energia and CCR SA 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 Equatorial Energia with a short position of CCR SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equatorial Energia and CCR SA.
Diversification Opportunities for Equatorial Energia and CCR SA
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equatorial and CCR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Equatorial Energia SA and CCR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCR SA and Equatorial Energia 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 Equatorial Energia SA are associated (or correlated) with CCR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCR SA has no effect on the direction of Equatorial Energia i.e., Equatorial Energia and CCR SA go up and down completely randomly.
Pair Corralation between Equatorial Energia and CCR SA
Assuming the 90 days trading horizon Equatorial Energia SA is expected to generate 1.01 times more return on investment than CCR SA. However, Equatorial Energia is 1.01 times more volatile than CCR SA. It trades about 0.13 of its potential returns per unit of risk. CCR SA is currently generating about 0.0 per unit of risk. If you would invest 3,168 in Equatorial Energia SA on August 28, 2024 and sell it today you would earn a total of 122.00 from holding Equatorial Energia SA or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equatorial Energia SA vs. CCR SA
Performance |
| Timeline |
| Equatorial Energia |
| CCR SA |
Equatorial Energia and CCR SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equatorial Energia and CCR SA
The main advantage of trading using opposite Equatorial Energia and CCR SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equatorial Energia position performs unexpectedly, CCR SA 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 CCR SA will offset losses from the drop in CCR SA's long position.| Equatorial Energia vs. BB Seguridade Participacoes | Equatorial Energia vs. Engie Brasil Energia | Equatorial Energia vs. CTEEP Companhia | Equatorial Energia vs. Itasa Investimentos |
| CCR SA vs. EcoRodovias Infraestrutura e | CCR SA vs. Companhia de Saneamento | CCR SA vs. Companhia Energtica de | CCR SA vs. Cosan SA |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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