Correlation Between Centro De and Tecnisa SA
Can any of the company-specific risk be diversified away by investing in both Centro De and Tecnisa SA 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 Tecnisa SA 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 Tecnisa SA, you can compare the effects of market volatilities on Centro De and Tecnisa SA 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 Tecnisa SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centro De and Tecnisa SA.
Diversification Opportunities for Centro De and Tecnisa SA
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centro and Tecnisa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Centro de Imagem and Tecnisa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecnisa SA 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 Tecnisa SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecnisa SA has no effect on the direction of Centro De i.e., Centro De and Tecnisa SA go up and down completely randomly.
Pair Corralation between Centro De and Tecnisa SA
Assuming the 90 days trading horizon Centro de Imagem is expected to generate 1.45 times more return on investment than Tecnisa SA. However, Centro De is 1.45 times more volatile than Tecnisa SA. It trades about 0.06 of its potential returns per unit of risk. Tecnisa SA is currently generating about -0.1 per unit of risk. If you would invest 996.00 in Centro de Imagem on August 29, 2024 and sell it today you would earn a total of 239.00 from holding Centro de Imagem or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centro de Imagem vs. Tecnisa SA
Performance |
| Timeline |
| Centro de Imagem |
| Tecnisa SA |
Centro De and Tecnisa SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centro De and Tecnisa SA
The main advantage of trading using opposite Centro De and Tecnisa SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centro De position performs unexpectedly, Tecnisa SA 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 Tecnisa SA will offset losses from the drop in Tecnisa SA'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 |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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