Correlation Between Sendas Distribuidora and CP All
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and CP All 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 Sendas Distribuidora and CP All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sendas Distribuidora SA and CP All PCL, you can compare the effects of market volatilities on Sendas Distribuidora and CP All 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 Sendas Distribuidora with a short position of CP All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and CP All.
Diversification Opportunities for Sendas Distribuidora and CP All
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sendas and CPPCY is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and CP All PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP All PCL and Sendas Distribuidora 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 Sendas Distribuidora SA are associated (or correlated) with CP All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP All PCL has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and CP All go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and CP All
Given the investment horizon of 90 days Sendas Distribuidora SA is expected to under-perform the CP All. But the stock apears to be less risky and, when comparing its historical volatility, Sendas Distribuidora SA is 1.05 times less risky than CP All. The stock trades about -0.09 of its potential returns per unit of risk. The CP All PCL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,503 in CP All PCL on September 3, 2024 and sell it today you would earn a total of 449.00 from holding CP All PCL or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.23% |
| Values | Daily Returns |
Sendas Distribuidora SA vs. CP All PCL
Performance |
| Timeline |
| Sendas Distribuidora |
| CP All PCL |
Sendas Distribuidora and CP All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sendas Distribuidora and CP All
The main advantage of trading using opposite Sendas Distribuidora and CP All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora position performs unexpectedly, CP All 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 CP All will offset losses from the drop in CP All's long position.| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
| CP All vs. Kesko Oyj ADR | CP All vs. Om Holdings International | CP All vs. Tesco PLC | CP All vs. Carrefour 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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