Correlation Between Schlumberger and Energisa
Can any of the company-specific risk be diversified away by investing in both Schlumberger 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 Schlumberger and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schlumberger Limited and Energisa SA, you can compare the effects of market volatilities on Schlumberger 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 Schlumberger with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schlumberger and Energisa.
Diversification Opportunities for Schlumberger and Energisa
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Schlumberger and Energisa is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger Limited and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and Schlumberger 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 Schlumberger Limited 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 Schlumberger i.e., Schlumberger and Energisa go up and down completely randomly.
Pair Corralation between Schlumberger and Energisa
Assuming the 90 days trading horizon Schlumberger Limited is expected to generate 0.9 times more return on investment than Energisa. However, Schlumberger Limited is 1.11 times less risky than Energisa. It trades about -0.14 of its potential returns per unit of risk. Energisa SA is currently generating about -0.2 per unit of risk. If you would invest 12,519 in Schlumberger Limited on October 12, 2024 and sell it today you would lose (673.00) from holding Schlumberger Limited or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schlumberger Limited vs. Energisa SA
Performance |
| Timeline |
| Schlumberger Limited |
| Energisa SA |
Schlumberger and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schlumberger and Energisa
The main advantage of trading using opposite Schlumberger and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger 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.| Schlumberger vs. Multilaser Industrial SA | Schlumberger vs. Automatic Data Processing | Schlumberger vs. METISA Metalrgica Timboense | Schlumberger vs. Tres Tentos Agroindustrial |
| Energisa vs. Equatorial Energia SA | Energisa vs. CPFL Energia SA | Energisa vs. Eneva SA | Energisa 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |