Correlation Between Companhia Energetica and AES

Can any of the company-specific risk be diversified away by investing in both Companhia Energetica and AES 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 Energetica and AES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Companhia Energetica de and The AES, you can compare the effects of market volatilities on Companhia Energetica and AES 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 Energetica with a short position of AES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energetica and AES.

Diversification Opportunities for Companhia Energetica and AES

-0.07

Correlation Coefficient

Companhia Energetica  AES

Good diversification

The 3 months correlation between Companhia and AES is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energetica de and The AES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES and Companhia Energetica 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 Energetica de are associated (or correlated) with AES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES has no effect on the direction of Companhia Energetica i.e., Companhia Energetica and AES go up and down completely randomly.

Pair Corralation between Companhia Energetica and AES

Considering the 90-day investment horizon Companhia Energetica de is expected to under-perform the AES. But the stock apears to be less risky and, when comparing its historical volatility, Companhia Energetica de is 1.47 times less risky than AES. The stock trades about 0.0 of its potential returns per unit of risk. The The AES is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,269  in The AES on September 11, 2025 and sell it today you would earn a total of  122.00  from holding The AES or generate 9.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Companhia Energetica de  vs.  The AES

Companhia Energetica

Risk-Adjusted Performance

Weakest

Over the last 90 days Companhia Energetica de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Companhia Energetica is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AES

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, AES may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with Companhia Energetica and AES

The main advantage of trading using opposite Companhia Energetica and AES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energetica position performs unexpectedly, AES 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 AES will offset losses from the drop in AES's long position.

The idea behind Companhia Energetica de and The AES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.