Correlation Between Lojas Quero and Energisa
Can any of the company-specific risk be diversified away by investing in both Lojas Quero 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 Lojas Quero and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lojas Quero Quero SA and Energisa SA, you can compare the effects of market volatilities on Lojas Quero 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 Lojas Quero with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lojas Quero and Energisa.
Diversification Opportunities for Lojas Quero and Energisa
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lojas and Energisa is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lojas Quero Quero SA and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and Lojas Quero 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 Lojas Quero Quero SA 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 Lojas Quero i.e., Lojas Quero and Energisa go up and down completely randomly.
Pair Corralation between Lojas Quero and Energisa
Assuming the 90 days trading horizon Lojas Quero Quero SA is expected to under-perform the Energisa. In addition to that, Lojas Quero is 2.43 times more volatile than Energisa SA. It trades about -0.08 of its total potential returns per unit of risk. Energisa SA is currently generating about -0.09 per unit of volatility. If you would invest 746.00 in Energisa SA on August 24, 2024 and sell it today you would lose (24.00) from holding Energisa SA or give up 3.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lojas Quero Quero SA vs. Energisa SA
Performance |
| Timeline |
| Lojas Quero Quero |
| Energisa SA |
Lojas Quero and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lojas Quero and Energisa
The main advantage of trading using opposite Lojas Quero and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lojas Quero 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.| Lojas Quero vs. Pet Center Comrcio | Lojas Quero vs. Mitre Realty Empreendimentos | Lojas Quero vs. Mliuz SA | Lojas Quero vs. Direcional Engenharia SA |
| Energisa vs. CTEEP Companhia | Energisa vs. CPFL Energia SA | Energisa vs. BTG Pactual Logstica | Energisa vs. Plano Plano Desenvolvimento |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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