Correlation Between Renova Energia and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Renova Energia and CM Hospitalar 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 Renova Energia and CM Hospitalar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renova Energia SA and CM Hospitalar SA, you can compare the effects of market volatilities on Renova Energia and CM Hospitalar 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 Renova Energia with a short position of CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renova Energia and CM Hospitalar.
Diversification Opportunities for Renova Energia and CM Hospitalar
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Renova and VVEO3 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Renova Energia SA and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA and Renova Energia 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 Renova Energia SA are associated (or correlated) with CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Renova Energia i.e., Renova Energia and CM Hospitalar go up and down completely randomly.
Pair Corralation between Renova Energia and CM Hospitalar
Assuming the 90 days trading horizon Renova Energia SA is expected to generate 0.57 times more return on investment than CM Hospitalar. However, Renova Energia SA is 1.75 times less risky than CM Hospitalar. It trades about -0.29 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.25 per unit of risk. If you would invest 105.00 in Renova Energia SA on September 12, 2024 and sell it today you would lose (14.00) from holding Renova Energia SA or give up 13.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Renova Energia SA vs. CM Hospitalar SA
Performance |
| Timeline |
| Renova Energia SA |
| CM Hospitalar SA |
Renova Energia and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renova Energia and CM Hospitalar
The main advantage of trading using opposite Renova Energia and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renova Energia position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Renova Energia vs. CM Hospitalar SA | Renova Energia vs. G2D Investments | Renova Energia vs. Delta Air Lines | Renova Energia vs. UnitedHealth Group Incorporated |
| CM Hospitalar vs. Fundo Investimento Imobiliario | CM Hospitalar vs. LESTE FDO INV | CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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