Correlation Between Alupar Investimento and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both Alupar Investimento and BB Seguridade 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 Alupar Investimento and BB Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alupar Investimento SA and BB Seguridade Participacoes, you can compare the effects of market volatilities on Alupar Investimento and BB Seguridade 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 Alupar Investimento with a short position of BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alupar Investimento and BB Seguridade.
Diversification Opportunities for Alupar Investimento and BB Seguridade
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alupar and BBSE3 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Alupar Investimento SA and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic and Alupar Investimento 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 Alupar Investimento SA are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Alupar Investimento i.e., Alupar Investimento and BB Seguridade go up and down completely randomly.
Pair Corralation between Alupar Investimento and BB Seguridade
Assuming the 90 days trading horizon Alupar Investimento SA is expected to under-perform the BB Seguridade. In addition to that, Alupar Investimento is 1.12 times more volatile than BB Seguridade Participacoes. It trades about -0.01 of its total potential returns per unit of risk. BB Seguridade Participacoes is currently generating about 0.03 per unit of volatility. If you would invest 3,210 in BB Seguridade Participacoes on August 27, 2024 and sell it today you would earn a total of 185.00 from holding BB Seguridade Participacoes or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.95% |
| Values | Daily Returns |
Alupar Investimento SA vs. BB Seguridade Participacoes
Performance |
| Timeline |
| Alupar Investimento |
| BB Seguridade Partic |
Alupar Investimento and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alupar Investimento and BB Seguridade
The main advantage of trading using opposite Alupar Investimento and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alupar Investimento position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| Alupar Investimento vs. Companhia de Saneamento | Alupar Investimento vs. Transmissora Aliana de | Alupar Investimento vs. BB Seguridade Participacoes | Alupar Investimento vs. Hypera SA |
| BB Seguridade vs. Banco Alfa de | BB Seguridade vs. Financeira Alfa SA | BB Seguridade vs. Banco Alfa de | BB Seguridade vs. Financeira Alfa SA |
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.
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