Correlation Between State Bank and EDP -
Can any of the company-specific risk be diversified away by investing in both State Bank and EDP - 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 State Bank and EDP - into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and EDP Energias, you can compare the effects of market volatilities on State Bank and EDP - 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 State Bank with a short position of EDP -. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and EDP -.
Diversification Opportunities for State Bank and EDP -
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and EDP is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and EDP Energias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDP Energias and State Bank 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 State Bank of are associated (or correlated) with EDP -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDP Energias has no effect on the direction of State Bank i.e., State Bank and EDP - go up and down completely randomly.
Pair Corralation between State Bank and EDP -
Assuming the 90 days horizon State Bank of is expected to generate 1.12 times more return on investment than EDP -. However, State Bank is 1.12 times more volatile than EDP Energias. It trades about 0.04 of its potential returns per unit of risk. EDP Energias is currently generating about -0.08 per unit of risk. If you would invest 8,950 in State Bank of on September 3, 2024 and sell it today you would earn a total of 300.00 from holding State Bank of or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. EDP Energias
Performance |
| Timeline |
| State Bank |
| EDP Energias |
State Bank and EDP - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and EDP -
The main advantage of trading using opposite State Bank and EDP - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, EDP - 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 EDP - will offset losses from the drop in EDP -'s long position.| State Bank vs. Evolution Mining Limited | State Bank vs. MTI WIRELESS EDGE | State Bank vs. GALENA MINING LTD | State Bank vs. MCEWEN MINING INC |
| EDP - vs. Harmony Gold Mining | EDP - vs. AIR PRODCHEMICALS | EDP - vs. Diamondrock Hospitality Co | EDP - vs. Jacquet Metal Service |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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