Correlation Between Companhia Paranaense and Consolidated Edison
Can any of the company-specific risk be diversified away by investing in both Companhia Paranaense and Consolidated Edison 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 Companhia Paranaense and Consolidated Edison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Paranaense de and Consolidated Edison, you can compare the effects of market volatilities on Companhia Paranaense and Consolidated Edison 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 Companhia Paranaense with a short position of Consolidated Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Paranaense and Consolidated Edison.
Diversification Opportunities for Companhia Paranaense and Consolidated Edison
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Companhia and Consolidated is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Paranaense de and Consolidated Edison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Edison and Companhia Paranaense 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 Companhia Paranaense de are associated (or correlated) with Consolidated Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Edison has no effect on the direction of Companhia Paranaense i.e., Companhia Paranaense and Consolidated Edison go up and down completely randomly.
Pair Corralation between Companhia Paranaense and Consolidated Edison
Given the investment horizon of 90 days Companhia Paranaense de is expected to generate 1.67 times more return on investment than Consolidated Edison. However, Companhia Paranaense is 1.67 times more volatile than Consolidated Edison. It trades about 0.21 of its potential returns per unit of risk. Consolidated Edison is currently generating about -0.05 per unit of risk. If you would invest 626.00 in Companhia Paranaense de on March 26, 2025 and sell it today you would earn a total of 213.00 from holding Companhia Paranaense de or generate 34.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Paranaense de vs. Consolidated Edison
Performance |
| Timeline |
| Companhia Paranaense |
| Consolidated Edison |
Companhia Paranaense and Consolidated Edison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Paranaense and Consolidated Edison
The main advantage of trading using opposite Companhia Paranaense and Consolidated Edison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Paranaense position performs unexpectedly, Consolidated Edison 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 Consolidated Edison will offset losses from the drop in Consolidated Edison's long position.| Companhia Paranaense vs. Canlan Ice Sports | Companhia Paranaense vs. Alaska Air Group | Companhia Paranaense vs. Delta Air Lines | Companhia Paranaense vs. Academy Sports Outdoors |
| Consolidated Edison vs. Duke Energy | Consolidated Edison vs. Dominion Energy | Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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