Correlation Between Azul SA and Bahema Educao
Can any of the company-specific risk be diversified away by investing in both Azul SA and Bahema Educao 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 Azul SA and Bahema Educao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azul SA and Bahema Educao SA, you can compare the effects of market volatilities on Azul SA and Bahema Educao 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 Azul SA with a short position of Bahema Educao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azul SA and Bahema Educao.
Diversification Opportunities for Azul SA and Bahema Educao
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Azul and Bahema is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Azul SA and Bahema Educao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bahema Educao SA and Azul SA 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 Azul SA are associated (or correlated) with Bahema Educao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bahema Educao SA has no effect on the direction of Azul SA i.e., Azul SA and Bahema Educao go up and down completely randomly.
Pair Corralation between Azul SA and Bahema Educao
Assuming the 90 days trading horizon Azul SA is expected to generate 1.03 times more return on investment than Bahema Educao. However, Azul SA is 1.03 times more volatile than Bahema Educao SA. It trades about 0.29 of its potential returns per unit of risk. Bahema Educao SA is currently generating about -0.11 per unit of risk. If you would invest 364.00 in Azul SA on November 1, 2024 and sell it today you would earn a total of 96.00 from holding Azul SA or generate 26.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Azul SA vs. Bahema Educao SA
Performance |
| Timeline |
| Azul SA |
| Bahema Educao SA |
Azul SA and Bahema Educao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azul SA and Bahema Educao
The main advantage of trading using opposite Azul SA and Bahema Educao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azul SA position performs unexpectedly, Bahema Educao 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 Bahema Educao will offset losses from the drop in Bahema Educao's long position.| Azul SA vs. Gol Linhas Areas | Azul SA vs. CVC Brasil Operadora | Azul SA vs. IRB Brasil Resseguros SA | Azul SA vs. Magazine Luiza SA |
| Bahema Educao vs. Biomm SA | Bahema Educao vs. GAEC Educacao SA | Bahema Educao vs. T4F Entretenimento SA | Bahema Educao vs. Ser Educacional 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 CEOs Directory module to screen CEOs from public companies around the world.
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