Correlation Between Atom Empreendimentos and Bombril SA
Can any of the company-specific risk be diversified away by investing in both Atom Empreendimentos and Bombril 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 Atom Empreendimentos and Bombril SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atom Empreendimentos e and Bombril SA, you can compare the effects of market volatilities on Atom Empreendimentos and Bombril 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 Atom Empreendimentos with a short position of Bombril SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atom Empreendimentos and Bombril SA.
Diversification Opportunities for Atom Empreendimentos and Bombril SA
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atom and Bombril is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Atom Empreendimentos e and Bombril SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombril SA and Atom Empreendimentos 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 Atom Empreendimentos e are associated (or correlated) with Bombril SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombril SA has no effect on the direction of Atom Empreendimentos i.e., Atom Empreendimentos and Bombril SA go up and down completely randomly.
Pair Corralation between Atom Empreendimentos and Bombril SA
Assuming the 90 days trading horizon Atom Empreendimentos e is expected to generate 3.11 times more return on investment than Bombril SA. However, Atom Empreendimentos is 3.11 times more volatile than Bombril SA. It trades about 0.04 of its potential returns per unit of risk. Bombril SA is currently generating about -0.39 per unit of risk. If you would invest 400.00 in Atom Empreendimentos e on September 2, 2024 and sell it today you would lose (1.00) from holding Atom Empreendimentos e or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atom Empreendimentos e vs. Bombril SA
Performance |
| Timeline |
| Atom Empreendimentos |
| Bombril SA |
Atom Empreendimentos and Bombril SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atom Empreendimentos and Bombril SA
The main advantage of trading using opposite Atom Empreendimentos and Bombril SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atom Empreendimentos position performs unexpectedly, Bombril 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 Bombril SA will offset losses from the drop in Bombril SA's long position.| Atom Empreendimentos vs. LPS Brasil | Atom Empreendimentos vs. PBG SA | Atom Empreendimentos vs. Springs Global Participaes | Atom Empreendimentos vs. Indstrias Romi SA |
| Bombril SA vs. Eternit SA | Bombril SA vs. Lupatech SA | Bombril SA vs. Inepar SA Indstria | Bombril SA vs. Marcopolo 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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