Correlation Between Centrais Electricas and Sentinel Small
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and Sentinel Small 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 Centrais Electricas and Sentinel Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and Sentinel Small, you can compare the effects of market volatilities on Centrais Electricas and Sentinel Small 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 Centrais Electricas with a short position of Sentinel Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Sentinel Small.
Diversification Opportunities for Centrais Electricas and Sentinel Small
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrais and Sentinel is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Sentinel Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Small and Centrais Electricas 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 Centrais Electricas Brasileiras are associated (or correlated) with Sentinel Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Small has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and Sentinel Small go up and down completely randomly.
Pair Corralation between Centrais Electricas and Sentinel Small
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to generate 2.08 times more return on investment than Sentinel Small. However, Centrais Electricas is 2.08 times more volatile than Sentinel Small. It trades about 0.14 of its potential returns per unit of risk. Sentinel Small is currently generating about 0.13 per unit of risk. If you would invest 713.00 in Centrais Electricas Brasileiras on June 10, 2025 and sell it today you would earn a total of 133.00 from holding Centrais Electricas Brasileiras or generate 18.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Sentinel Small
Performance |
| Timeline |
| Centrais Electricas |
| Sentinel Small |
Centrais Electricas and Sentinel Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Sentinel Small
The main advantage of trading using opposite Centrais Electricas and Sentinel Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, Sentinel Small 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 Sentinel Small will offset losses from the drop in Sentinel Small's long position.| Centrais Electricas vs. Enel Chile SA | Centrais Electricas vs. Centrais Eltricas Brasileiras | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Central Puerto SA |
| Sentinel Small vs. Chase Growth Fund | Sentinel Small vs. Lebenthal Lisanti Small | Sentinel Small vs. Goldman Sachs Equity | Sentinel Small vs. T Rowe Price |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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