Correlation Between GALENA MINING and ENGIE Brasil

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

By analyzing existing cross correlation between GALENA MINING LTD and ENGIE Brasil Energia, you can compare the effects of market volatilities on GALENA MINING and ENGIE Brasil 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 GALENA MINING with a short position of ENGIE Brasil. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and ENGIE Brasil.

Diversification Opportunities for GALENA MINING and ENGIE Brasil

0.0

Correlation Coefficient

GALENA MINING  ENGIE Brasil

Pay attention - limited upside

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

Pair Corralation between GALENA MINING and ENGIE Brasil

If you would invest  3.05  in GALENA MINING LTD on October 26, 2024 and sell it today you would earn a total of  0.00  from holding GALENA MINING LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

GALENA MINING LTD  vs.  ENGIE Brasil Energia

GALENA MINING LTD

Risk-Adjusted Performance

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Very Weak

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

ENGIE Brasil Energia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENGIE Brasil Energia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GALENA MINING and ENGIE Brasil

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

The idea behind GALENA MINING LTD and ENGIE Brasil Energia 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.