Correlation Between Cosan and FirstEnergy
Can any of the company-specific risk be diversified away by investing in both Cosan and FirstEnergy 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 FirstEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan Limited and FirstEnergy, you can compare the effects of market volatilities on Cosan and FirstEnergy 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 FirstEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan and FirstEnergy.
Diversification Opportunities for Cosan and FirstEnergy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cosan and FirstEnergy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cosan Limited and FirstEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstEnergy 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 FirstEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstEnergy has no effect on the direction of Cosan i.e., Cosan and FirstEnergy go up and down completely randomly.
Pair Corralation between Cosan and FirstEnergy
If you would invest (100.00) in Cosan Limited on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Cosan Limited or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cosan Limited vs. FirstEnergy
Performance |
| Timeline |
| Cosan Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FirstEnergy |
Cosan and FirstEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan and FirstEnergy
The main advantage of trading using opposite Cosan and FirstEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan position performs unexpectedly, FirstEnergy 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 FirstEnergy will offset losses from the drop in FirstEnergy's long position.| Cosan vs. GMS Inc | Cosan vs. Highway Holdings Limited | Cosan vs. Harmony Gold Mining | Cosan vs. Regeneron Pharmaceuticals |
| FirstEnergy vs. Portland General Electric | FirstEnergy vs. MGE Energy | FirstEnergy vs. CMS Energy | FirstEnergy vs. OGE Energy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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