Correlation Between CTEEP Companhia and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both CTEEP Companhia and BB Seguridade 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 CTEEP Companhia and BB Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTEEP Companhia and BB Seguridade Participacoes, you can compare the effects of market volatilities on CTEEP Companhia and BB Seguridade 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 CTEEP Companhia with a short position of BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTEEP Companhia and BB Seguridade.
Diversification Opportunities for CTEEP Companhia and BB Seguridade
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTEEP and BBSE3 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CTEEP Companhia and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic and CTEEP Companhia 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 CTEEP Companhia are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of CTEEP Companhia i.e., CTEEP Companhia and BB Seguridade go up and down completely randomly.
Pair Corralation between CTEEP Companhia and BB Seguridade
Assuming the 90 days trading horizon CTEEP Companhia is expected to generate 1.04 times less return on investment than BB Seguridade. But when comparing it to its historical volatility, CTEEP Companhia is 1.11 times less risky than BB Seguridade. It trades about 0.04 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,664 in BB Seguridade Participacoes on August 24, 2024 and sell it today you would earn a total of 684.00 from holding BB Seguridade Participacoes or generate 25.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.8% |
| Values | Daily Returns |
CTEEP Companhia vs. BB Seguridade Participacoes
Performance |
| Timeline |
| CTEEP Companhia |
| BB Seguridade Partic |
CTEEP Companhia and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTEEP Companhia and BB Seguridade
The main advantage of trading using opposite CTEEP Companhia and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTEEP Companhia position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| CTEEP Companhia vs. Transmissora Aliana de | CTEEP Companhia vs. Companhia Paranaense de | CTEEP Companhia vs. BB Seguridade Participacoes | CTEEP Companhia vs. Engie Brasil Energia |
| BB Seguridade vs. Transmissora Aliana de | BB Seguridade vs. Banco do Brasil | BB Seguridade vs. Itasa Investimentos | BB Seguridade vs. Engie Brasil Energia |
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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