Correlation Between Light SA and Centrais Eltricas
Can any of the company-specific risk be diversified away by investing in both Light SA and Centrais Eltricas 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 Light SA and Centrais Eltricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light SA and Centrais Eltricas Brasileiras, you can compare the effects of market volatilities on Light SA and Centrais Eltricas 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 Light SA with a short position of Centrais Eltricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light SA and Centrais Eltricas.
Diversification Opportunities for Light SA and Centrais Eltricas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Light and Centrais is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Light SA and Centrais Eltricas Brasileiras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Eltricas and Light SA 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 Light SA are associated (or correlated) with Centrais Eltricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Eltricas has no effect on the direction of Light SA i.e., Light SA and Centrais Eltricas go up and down completely randomly.
Pair Corralation between Light SA and Centrais Eltricas
If you would invest 0.00 in Light SA on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Light SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Light SA vs. Centrais Eltricas Brasileiras
Performance |
| Timeline |
| Light SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Centrais Eltricas |
Light SA and Centrais Eltricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light SA and Centrais Eltricas
The main advantage of trading using opposite Light SA and Centrais Eltricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light SA position performs unexpectedly, Centrais Eltricas 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 Eltricas will offset losses from the drop in Centrais Eltricas' long position.| Light SA vs. CPFL Energia SA | Light SA vs. Companhia Energtica de | Light SA vs. Centrais Eltricas Brasileiras | Light SA vs. Companhia de Saneamento |
| Centrais Eltricas vs. Centrais Eltricas Brasileiras | Centrais Eltricas vs. Companhia Energtica de | Centrais Eltricas vs. Companhia Paranaense de | Centrais Eltricas 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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