Correlation Between Real Estate and Energisa
Can any of the company-specific risk be diversified away by investing in both Real Estate 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 Real Estate and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Estate Investment and Energisa SA, you can compare the effects of market volatilities on Real Estate 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 Real Estate with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Estate and Energisa.
Diversification Opportunities for Real Estate and Energisa
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Real and Energisa is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Investment and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and Real Estate 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 Real Estate Investment 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 Real Estate i.e., Real Estate and Energisa go up and down completely randomly.
Pair Corralation between Real Estate and Energisa
Assuming the 90 days trading horizon Real Estate Investment is expected to generate 0.54 times more return on investment than Energisa. However, Real Estate Investment is 1.85 times less risky than Energisa. It trades about -0.04 of its potential returns per unit of risk. Energisa SA is currently generating about -0.07 per unit of risk. If you would invest 870.00 in Real Estate Investment on September 1, 2024 and sell it today you would lose (39.00) from holding Real Estate Investment or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Estate Investment vs. Energisa SA
Performance |
| Timeline |
| Real Estate Investment |
| Energisa SA |
Real Estate and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Estate and Energisa
The main advantage of trading using opposite Real Estate and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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.| Real Estate vs. Energisa SA | Real Estate vs. BTG Pactual Logstica | Real Estate vs. Plano Plano Desenvolvimento | Real Estate vs. Companhia Habitasul de |
| Energisa vs. Transmissora Aliana de | Energisa vs. CTEEP Companhia | Energisa vs. Companhia Paranaense de | Energisa vs. Companhia Energtica de |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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