Correlation Between Innergex Renewable and Centrais Electricas
Can any of the company-specific risk be diversified away by investing in both Innergex Renewable and Centrais Electricas 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 Innergex Renewable and Centrais Electricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innergex Renewable Energy and Centrais Electricas Brasileiras, you can compare the effects of market volatilities on Innergex Renewable and Centrais Electricas 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 Innergex Renewable with a short position of Centrais Electricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innergex Renewable and Centrais Electricas.
Diversification Opportunities for Innergex Renewable and Centrais Electricas
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innergex and Centrais is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Innergex Renewable Energy and Centrais Electricas Brasileira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Electricas and Innergex Renewable 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 Innergex Renewable Energy are associated (or correlated) with Centrais Electricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Electricas has no effect on the direction of Innergex Renewable i.e., Innergex Renewable and Centrais Electricas go up and down completely randomly.
Pair Corralation between Innergex Renewable and Centrais Electricas
Assuming the 90 days horizon Innergex Renewable Energy is expected to under-perform the Centrais Electricas. In addition to that, Innergex Renewable is 1.6 times more volatile than Centrais Electricas Brasileiras. It trades about -0.02 of its total potential returns per unit of risk. Centrais Electricas Brasileiras is currently generating about -0.03 per unit of volatility. If you would invest 760.00 in Centrais Electricas Brasileiras on August 31, 2024 and sell it today you would lose (189.00) from holding Centrais Electricas Brasileiras or give up 24.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.33% |
| Values | Daily Returns |
Innergex Renewable Energy vs. Centrais Electricas Brasileira
Performance |
| Timeline |
| Innergex Renewable Energy |
| Centrais Electricas |
Innergex Renewable and Centrais Electricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innergex Renewable and Centrais Electricas
The main advantage of trading using opposite Innergex Renewable and Centrais Electricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innergex Renewable position performs unexpectedly, Centrais Electricas 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 Centrais Electricas will offset losses from the drop in Centrais Electricas' long position.| Innergex Renewable vs. Nextera Energy | Innergex Renewable vs. Consumers Energy | Innergex Renewable vs. Duke Energy | Innergex Renewable vs. Centrais Electricas Brasileiras |
| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |