Correlation Between Equatorial Energia and Schlumberger

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

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

Diversification Opportunities for Equatorial Energia and Schlumberger

-0.73

Correlation Coefficient

Equatorial Energia  Schlumberger

Pay attention - limited upside

The 3 months correlation between Equatorial and Schlumberger is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Equatorial Energia SA and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited and Equatorial Energia 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 Equatorial Energia SA are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of Equatorial Energia i.e., Equatorial Energia and Schlumberger go up and down completely randomly.

Pair Corralation between Equatorial Energia and Schlumberger

Assuming the 90 days trading horizon Equatorial Energia SA is expected to generate 0.41 times more return on investment than Schlumberger. However, Equatorial Energia SA is 2.46 times less risky than Schlumberger. It trades about 0.19 of its potential returns per unit of risk. Schlumberger Limited is currently generating about -0.07 per unit of risk. If you would invest  3,187  in Equatorial Energia SA on March 21, 2025 and sell it today you would earn a total of  469.00  from holding Equatorial Energia SA or generate 14.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Equatorial Energia SA  vs.  Schlumberger Limited

Equatorial Energia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equatorial Energia SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Equatorial Energia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Schlumberger Limited

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Equatorial Energia and Schlumberger

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

The idea behind Equatorial Energia SA and Schlumberger Limited 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.