Correlation Between Atco and Companhia Energetica

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

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

Diversification Opportunities for Atco and Companhia Energetica

0.38

Correlation Coefficient

Atco  Companhia Energetica

Weak diversification

The 3 months correlation between Atco and Companhia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Atco and Companhia Energetica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energetica and Atco 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 Atco 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 Atco i.e., Atco and Companhia Energetica go up and down completely randomly.

Pair Corralation between Atco and Companhia Energetica

Assuming the 90 days horizon Atco is expected to generate 0.56 times more return on investment than Companhia Energetica. However, Atco is 1.77 times less risky than Companhia Energetica. It trades about 0.11 of its potential returns per unit of risk. Companhia Energetica de is currently generating about 0.02 per unit of risk. If you would invest  3,245  in Atco on December 29, 2024 and sell it today you would earn a total of  252.00  from holding Atco or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Atco  vs.  Companhia Energetica de

Atco

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atco are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, Atco may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Companhia Energetica

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Companhia Energetica de are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Atco and Companhia Energetica

The main advantage of trading using opposite Atco and Companhia Energetica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atco 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 Atco 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.