Correlation Between Companhia Paranaense and Dominion Energy
Can any of the company-specific risk be diversified away by investing in both Companhia Paranaense and Dominion Energy 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 Companhia Paranaense and Dominion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Paranaense de and Dominion Energy, you can compare the effects of market volatilities on Companhia Paranaense and Dominion Energy 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 Companhia Paranaense with a short position of Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Paranaense and Dominion Energy.
Diversification Opportunities for Companhia Paranaense and Dominion Energy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Companhia and Dominion is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Paranaense de and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy and Companhia Paranaense 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 Companhia Paranaense de are associated (or correlated) with Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of Companhia Paranaense i.e., Companhia Paranaense and Dominion Energy go up and down completely randomly.
Pair Corralation between Companhia Paranaense and Dominion Energy
Considering the 90-day investment horizon Companhia Paranaense de is expected to under-perform the Dominion Energy. But the stock apears to be less risky and, when comparing its historical volatility, Companhia Paranaense de is 1.44 times less risky than Dominion Energy. The stock trades about -0.28 of its potential returns per unit of risk. The Dominion Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,472 in Dominion Energy on January 19, 2024 and sell it today you would earn a total of 360.00 from holding Dominion Energy or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Paranaense de vs. Dominion Energy
Performance |
| Timeline |
| Companhia Paranaense |
| Dominion Energy |
Companhia Paranaense and Dominion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Paranaense and Dominion Energy
The main advantage of trading using opposite Companhia Paranaense and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Paranaense position performs unexpectedly, Dominion Energy 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.| Companhia Paranaense vs. Montauk Renewables | Companhia Paranaense vs. Energy of Minas | Companhia Paranaense vs. NorthWestern | Companhia Paranaense vs. Otter Tail |
| Dominion Energy vs. Southern Company | Dominion Energy vs. American Electric Power | Dominion Energy vs. Nextera Energy | Dominion Energy vs. Consolidated Edison |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |