Correlation Between Biomm SA and GAEC Educacao
Can any of the company-specific risk be diversified away by investing in both Biomm SA and GAEC Educacao 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 Biomm SA and GAEC Educacao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomm SA and GAEC Educacao SA, you can compare the effects of market volatilities on Biomm SA and GAEC Educacao 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 Biomm SA with a short position of GAEC Educacao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomm SA and GAEC Educacao.
Diversification Opportunities for Biomm SA and GAEC Educacao
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biomm and GAEC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Biomm SA and GAEC Educacao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAEC Educacao SA and Biomm 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 Biomm SA are associated (or correlated) with GAEC Educacao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAEC Educacao SA has no effect on the direction of Biomm SA i.e., Biomm SA and GAEC Educacao go up and down completely randomly.
Pair Corralation between Biomm SA and GAEC Educacao
Assuming the 90 days trading horizon Biomm SA is expected to generate 0.99 times more return on investment than GAEC Educacao. However, Biomm SA is 1.01 times less risky than GAEC Educacao. It trades about 0.03 of its potential returns per unit of risk. GAEC Educacao SA is currently generating about -0.19 per unit of risk. If you would invest 964.00 in Biomm SA on December 1, 2024 and sell it today you would earn a total of 5.00 from holding Biomm SA or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomm SA vs. GAEC Educacao SA
Performance |
| Timeline |
| Biomm SA |
| GAEC Educacao SA |
Biomm SA and GAEC Educacao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomm SA and GAEC Educacao
The main advantage of trading using opposite Biomm SA and GAEC Educacao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomm SA position performs unexpectedly, GAEC Educacao 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 GAEC Educacao will offset losses from the drop in GAEC Educacao's long position.| Biomm SA vs. Profarma Distribuidora de | Biomm SA vs. Ouro Fino Sade | Biomm SA vs. Centro de Imagem | Biomm SA vs. Bombril SA |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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