Correlation Between SDI Logstica and Energisa

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

By analyzing existing cross correlation between SDI Logstica Rio and Energisa SA, you can compare the effects of market volatilities on SDI Logstica and Energisa 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 SDI Logstica with a short position of Energisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of SDI Logstica and Energisa.

Diversification Opportunities for SDI Logstica and Energisa

0.0

Correlation Coefficient

SDI Logstica  Energisa

Pay attention - limited upside

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

Pair Corralation between SDI Logstica and Energisa

If you would invest  9,650  in SDI Logstica Rio on September 21, 2024 and sell it today you would earn a total of  0.00  from holding SDI Logstica Rio or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SDI Logstica Rio  vs.  Energisa SA

SDI Logstica Rio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SDI Logstica Rio has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong forward indicators, SDI Logstica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Energisa SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energisa SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SDI Logstica and Energisa

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

The idea behind SDI Logstica Rio and Energisa SA 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.