Correlation Between KILIMA VOLKANO and Energisa
Can any of the company-specific risk be diversified away by investing in both KILIMA VOLKANO and Energisa 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 KILIMA VOLKANO and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KILIMA VOLKANO RECEBVEIS and Energisa SA, you can compare the effects of market volatilities on KILIMA VOLKANO and Energisa 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 KILIMA VOLKANO with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of KILIMA VOLKANO and Energisa.
Diversification Opportunities for KILIMA VOLKANO and Energisa
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between KILIMA and Energisa is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding KILIMA VOLKANO RECEBVEIS and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and KILIMA VOLKANO 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 KILIMA VOLKANO RECEBVEIS are associated (or correlated) with Energisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energisa SA has no effect on the direction of KILIMA VOLKANO i.e., KILIMA VOLKANO and Energisa go up and down completely randomly.
Pair Corralation between KILIMA VOLKANO and Energisa
Assuming the 90 days trading horizon KILIMA VOLKANO RECEBVEIS is expected to under-perform the Energisa. In addition to that, KILIMA VOLKANO is 1.03 times more volatile than Energisa SA. It trades about -0.05 of its total potential returns per unit of risk. Energisa SA is currently generating about -0.04 per unit of volatility. If you would invest 4,686 in Energisa SA on November 28, 2024 and sell it today you would lose (635.00) from holding Energisa SA or give up 13.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KILIMA VOLKANO RECEBVEIS vs. Energisa SA
Performance |
| Timeline |
| KILIMA VOLKANO RECEBVEIS |
| Energisa SA |
KILIMA VOLKANO and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KILIMA VOLKANO and Energisa
The main advantage of trading using opposite KILIMA VOLKANO and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KILIMA VOLKANO position performs unexpectedly, Energisa 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 Energisa will offset losses from the drop in Energisa's long position.| KILIMA VOLKANO vs. BTG Pactual Logstica | KILIMA VOLKANO vs. Btg Pactual Real | KILIMA VOLKANO vs. Fundo Investimento Imobiliario | KILIMA VOLKANO vs. DEVANT PROPERTIES FUNDO |
| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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