Correlation Between BrasilAgro Companhia and Aura Minerals
Can any of the company-specific risk be diversified away by investing in both BrasilAgro Companhia and Aura Minerals 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 BrasilAgro Companhia and Aura Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrasilAgro Companhia and Aura Minerals, you can compare the effects of market volatilities on BrasilAgro Companhia and Aura Minerals 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 BrasilAgro Companhia with a short position of Aura Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrasilAgro Companhia and Aura Minerals.
Diversification Opportunities for BrasilAgro Companhia and Aura Minerals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BrasilAgro and Aura is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BrasilAgro Companhia and Aura Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Minerals and BrasilAgro Companhia 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 BrasilAgro Companhia are associated (or correlated) with Aura Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Minerals has no effect on the direction of BrasilAgro Companhia i.e., BrasilAgro Companhia and Aura Minerals go up and down completely randomly.
Pair Corralation between BrasilAgro Companhia and Aura Minerals
Assuming the 90 days trading horizon BrasilAgro Companhia is expected to generate 0.4 times more return on investment than Aura Minerals. However, BrasilAgro Companhia is 2.51 times less risky than Aura Minerals. It trades about 0.06 of its potential returns per unit of risk. Aura Minerals is currently generating about 0.02 per unit of risk. If you would invest 2,362 in BrasilAgro Companhia on August 28, 2024 and sell it today you would earn a total of 30.00 from holding BrasilAgro Companhia or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BrasilAgro Companhia vs. Aura Minerals
Performance |
| Timeline |
| BrasilAgro Companhia |
| Aura Minerals |
BrasilAgro Companhia and Aura Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BrasilAgro Companhia and Aura Minerals
The main advantage of trading using opposite BrasilAgro Companhia and Aura Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrasilAgro Companhia position performs unexpectedly, Aura Minerals 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 Aura Minerals will offset losses from the drop in Aura Minerals' long position.| BrasilAgro Companhia vs. Minerva SA | BrasilAgro Companhia vs. Companhia Siderrgica Nacional | BrasilAgro Companhia vs. Cyrela Brazil Realty |
| Aura Minerals vs. Ambipar Participaes e | Aura Minerals vs. BrasilAgro Companhia | Aura Minerals vs. Mliuz SA | Aura Minerals vs. Irani Papel e |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |