Correlation Between Cosan and AES
Can any of the company-specific risk be diversified away by investing in both Cosan and AES 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 Cosan and AES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan Limited and The AES, you can compare the effects of market volatilities on Cosan and AES 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 Cosan with a short position of AES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan and AES.
Diversification Opportunities for Cosan and AES
Pay attention - limited upside
The 3 months correlation between Cosan and AES is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cosan Limited and The AES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES and Cosan 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 Cosan Limited are associated (or correlated) with AES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES has no effect on the direction of Cosan i.e., Cosan and AES go up and down completely randomly.
Pair Corralation between Cosan and AES
If you would invest 1,560 in The AES on February 12, 2024 and sell it today you would earn a total of 434.00 from holding The AES or generate 27.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Cosan Limited vs. The AES
Performance |
Timeline |
Cosan Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AES |
Cosan and AES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cosan and AES
The main advantage of trading using opposite Cosan and AES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan position performs unexpectedly, AES 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 AES will offset losses from the drop in AES's long position.Cosan vs. Jeld Wen Holding | Cosan vs. Discover Financial Services | Cosan vs. Glacier Bancorp | Cosan vs. Pintec Technology Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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