Correlation Between Sendas Distribuidora and Companhia Brasileira
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and Companhia Brasileira 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 Companhia Brasileira 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 Companhia Brasileira de, you can compare the effects of market volatilities on Sendas Distribuidora and Companhia Brasileira 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 Companhia Brasileira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and Companhia Brasileira.
Diversification Opportunities for Sendas Distribuidora and Companhia Brasileira
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sendas and Companhia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and Companhia Brasileira de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Brasileira 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 Companhia Brasileira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Brasileira has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and Companhia Brasileira go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and Companhia Brasileira
Assuming the 90 days trading horizon Sendas Distribuidora SA is expected to generate 0.83 times more return on investment than Companhia Brasileira. However, Sendas Distribuidora SA is 1.21 times less risky than Companhia Brasileira. It trades about 0.14 of its potential returns per unit of risk. Companhia Brasileira de is currently generating about -0.04 per unit of risk. If you would invest 662.00 in Sendas Distribuidora SA on November 28, 2024 and sell it today you would earn a total of 50.00 from holding Sendas Distribuidora SA or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sendas Distribuidora SA vs. Companhia Brasileira de
Performance |
| Timeline |
| Sendas Distribuidora |
| Companhia Brasileira |
Sendas Distribuidora and Companhia Brasileira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sendas Distribuidora and Companhia Brasileira
The main advantage of trading using opposite Sendas Distribuidora and Companhia Brasileira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora position performs unexpectedly, Companhia Brasileira 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 Companhia Brasileira will offset losses from the drop in Companhia Brasileira's long position.| Sendas Distribuidora vs. Companhia Brasileira de | Sendas Distribuidora vs. Atacado SA | Sendas Distribuidora vs. Pet Center Comrcio | Sendas Distribuidora vs. Natura Co Holding |
| Companhia Brasileira vs. Atacado SA | Companhia Brasileira vs. Sendas Distribuidora SA | Companhia Brasileira vs. Natura Co Holding | Companhia Brasileira vs. Lojas Renner 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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