Correlation Between Centro De and General Shopping
Can any of the company-specific risk be diversified away by investing in both Centro De and General Shopping 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 Centro De and General Shopping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centro de Imagem and General Shopping e, you can compare the effects of market volatilities on Centro De and General Shopping 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 Centro De with a short position of General Shopping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centro De and General Shopping.
Diversification Opportunities for Centro De and General Shopping
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centro and General is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Centro de Imagem and General Shopping e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Shopping e and Centro De 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 Centro de Imagem are associated (or correlated) with General Shopping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Shopping e has no effect on the direction of Centro De i.e., Centro De and General Shopping go up and down completely randomly.
Pair Corralation between Centro De and General Shopping
Assuming the 90 days trading horizon Centro de Imagem is expected to generate 3.03 times more return on investment than General Shopping. However, Centro De is 3.03 times more volatile than General Shopping e. It trades about -0.02 of its potential returns per unit of risk. General Shopping e is currently generating about -0.24 per unit of risk. If you would invest 1,015 in Centro de Imagem on October 15, 2024 and sell it today you would lose (46.00) from holding Centro de Imagem or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centro de Imagem vs. General Shopping e
Performance |
| Timeline |
| Centro de Imagem |
| General Shopping e |
Centro De and General Shopping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centro De and General Shopping
The main advantage of trading using opposite Centro De and General Shopping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centro De position performs unexpectedly, General Shopping 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 General Shopping will offset losses from the drop in General Shopping's long position.| Centro De vs. LPS Brasil | Centro De vs. Camil Alimentos SA | Centro De vs. LOG Commercial Properties | Centro De vs. Movida Participaes SA |
| General Shopping vs. Tecnisa SA | General Shopping vs. Marcopolo SA | General Shopping vs. T4F Entretenimento SA | General Shopping vs. Centro de Imagem |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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