Correlation Between CM Hospitalar and Energisa
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar 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 CM Hospitalar and Energisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and Energisa SA, you can compare the effects of market volatilities on CM Hospitalar 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 CM Hospitalar with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Energisa.
Diversification Opportunities for CM Hospitalar and Energisa
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VVEO3 and Energisa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar SA and Energisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energisa SA and CM Hospitalar 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 CM Hospitalar SA 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 CM Hospitalar i.e., CM Hospitalar and Energisa go up and down completely randomly.
Pair Corralation between CM Hospitalar and Energisa
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the Energisa. In addition to that, CM Hospitalar is 2.34 times more volatile than Energisa SA. It trades about -0.1 of its total potential returns per unit of risk. Energisa SA is currently generating about 0.0 per unit of volatility. If you would invest 4,110 in Energisa SA on October 25, 2024 and sell it today you would lose (391.00) from holding Energisa SA or give up 9.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
CM Hospitalar SA vs. Energisa SA
Performance |
| Timeline |
| CM Hospitalar SA |
| Energisa SA |
CM Hospitalar and Energisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Energisa
The main advantage of trading using opposite CM Hospitalar and Energisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar 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.| CM Hospitalar vs. Clover Health Investments, | CM Hospitalar vs. Take Two Interactive Software | CM Hospitalar vs. G2D Investments | CM Hospitalar vs. Applied Materials, |
| Energisa vs. Equatorial Energia SA | Energisa vs. Eneva SA | Energisa vs. Companhia de Saneamento | Energisa vs. Centrais Eltricas Brasileiras |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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