Correlation Between Just Energy and Companhia Energetica

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

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

Diversification Opportunities for Just Energy and Companhia Energetica

0.0

Correlation Coefficient

Just Energy  Companhia Energetica

Pay attention - limited upside

The 3 months correlation between Just and Companhia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Just Energy Group and Companhia Energetica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energetica and Just Energy 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 Just Energy Group are associated (or correlated) with Companhia Energetica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energetica has no effect on the direction of Just Energy i.e., Just Energy and Companhia Energetica go up and down completely randomly.

Pair Corralation between Just Energy and Companhia Energetica

If you would invest  139.00  in Companhia Energetica de on January 19, 2024 and sell it today you would earn a total of  105.00  from holding Companhia Energetica de or generate 75.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Just Energy Group  vs.  Companhia Energetica de

Just Energy Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Just Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Just Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Companhia Energetica

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Companhia Energetica de are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, Companhia Energetica may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Just Energy and Companhia Energetica

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

The idea behind Just Energy Group and Companhia Energetica de 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.