Correlation Between Aesapar Fundo and Companhia Energtica
Can any of the company-specific risk be diversified away by investing in both Aesapar Fundo and Companhia Energtica 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 Aesapar Fundo and Companhia Energtica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aesapar Fundo de and Companhia Energtica de, you can compare the effects of market volatilities on Aesapar Fundo and Companhia Energtica 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 Aesapar Fundo with a short position of Companhia Energtica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aesapar Fundo and Companhia Energtica.
Diversification Opportunities for Aesapar Fundo and Companhia Energtica
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aesapar and Companhia is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de and Companhia Energtica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energtica and Aesapar Fundo 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 Aesapar Fundo de are associated (or correlated) with Companhia Energtica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energtica has no effect on the direction of Aesapar Fundo i.e., Aesapar Fundo and Companhia Energtica go up and down completely randomly.
Pair Corralation between Aesapar Fundo and Companhia Energtica
Assuming the 90 days trading horizon Aesapar Fundo de is expected to under-perform the Companhia Energtica. But the fund apears to be less risky and, when comparing its historical volatility, Aesapar Fundo de is 1.98 times less risky than Companhia Energtica. The fund trades about -0.05 of its potential returns per unit of risk. The Companhia Energtica de is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 946.00 in Companhia Energtica de on February 4, 2024 and sell it today you would earn a total of 106.00 from holding Companhia Energtica de or generate 11.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aesapar Fundo de vs. Companhia Energtica de
Performance |
Timeline |
Aesapar Fundo de |
Companhia Energtica |
Aesapar Fundo and Companhia Energtica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aesapar Fundo and Companhia Energtica
The main advantage of trading using opposite Aesapar Fundo and Companhia Energtica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesapar Fundo position performs unexpectedly, Companhia Energtica 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 Companhia Energtica will offset losses from the drop in Companhia Energtica's long position.Aesapar Fundo vs. Fundo De Investimento | Aesapar Fundo vs. Domo Fundo de | Aesapar Fundo vs. FUNDO DE INVESTIMENTO | Aesapar Fundo vs. Imob I Fundo |
Companhia Energtica vs. Companhia de Saneamento | Companhia Energtica vs. Bradespar SA | Companhia Energtica vs. Braskem SA | Companhia Energtica vs. CPFL Energia SA |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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