Correlation Between Companhia Energtica and Apple
Can any of the company-specific risk be diversified away by investing in both Companhia Energtica and Apple 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 Energtica and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Energtica de and Apple Inc, you can compare the effects of market volatilities on Companhia Energtica and Apple 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 Energtica with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energtica and Apple.
Diversification Opportunities for Companhia Energtica and Apple
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Apple is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energtica de and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Companhia Energtica 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 Energtica de are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Companhia Energtica i.e., Companhia Energtica and Apple go up and down completely randomly.
Pair Corralation between Companhia Energtica and Apple
Assuming the 90 days trading horizon Companhia Energtica de is expected to generate 3.25 times more return on investment than Apple. However, Companhia Energtica is 3.25 times more volatile than Apple Inc. It trades about 0.33 of its potential returns per unit of risk. Apple Inc is currently generating about 0.07 per unit of risk. If you would invest 2,029 in Companhia Energtica de on January 26, 2024 and sell it today you would earn a total of 701.00 from holding Companhia Energtica de or generate 34.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Companhia Energtica de vs. Apple Inc
Performance |
Timeline |
Companhia Energtica |
Apple Inc |
Companhia Energtica and Apple Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Companhia Energtica and Apple
The main advantage of trading using opposite Companhia Energtica and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energtica position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Companhia Energtica de | Companhia Energtica vs. Companhiade Eletricidade do | Companhia Energtica vs. Empresa Metropolitana de |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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