Correlation Between BRF SA and SLC Agrcola
Can any of the company-specific risk be diversified away by investing in both BRF SA and SLC Agrcola 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 BRF SA and SLC Agrcola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRF SA and SLC Agrcola SA, you can compare the effects of market volatilities on BRF SA and SLC Agrcola 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 BRF SA with a short position of SLC Agrcola. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRF SA and SLC Agrcola.
Diversification Opportunities for BRF SA and SLC Agrcola
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BRF and SLC is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BRF SA and SLC Agrcola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLC Agrcola SA and BRF 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 BRF SA are associated (or correlated) with SLC Agrcola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLC Agrcola SA has no effect on the direction of BRF SA i.e., BRF SA and SLC Agrcola go up and down completely randomly.
Pair Corralation between BRF SA and SLC Agrcola
Assuming the 90 days trading horizon BRF SA is expected to under-perform the SLC Agrcola. In addition to that, BRF SA is 1.91 times more volatile than SLC Agrcola SA. It trades about -0.01 of its total potential returns per unit of risk. SLC Agrcola SA is currently generating about 0.04 per unit of volatility. If you would invest 1,735 in SLC Agrcola SA on August 31, 2024 and sell it today you would earn a total of 17.00 from holding SLC Agrcola SA or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRF SA vs. SLC Agrcola SA
Performance |
| Timeline |
| BRF SA |
| SLC Agrcola SA |
BRF SA and SLC Agrcola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRF SA and SLC Agrcola
The main advantage of trading using opposite BRF SA and SLC Agrcola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRF SA position performs unexpectedly, SLC Agrcola 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 SLC Agrcola will offset losses from the drop in SLC Agrcola's long position.| BRF SA vs. Companhia Siderrgica Nacional | BRF SA vs. Cyrela Brazil Realty | BRF SA vs. Fras le SA | BRF SA vs. Energisa SA |
| SLC Agrcola vs. BrasilAgro Companhia | SLC Agrcola vs. So Martinho SA | SLC Agrcola vs. Marfrig Global Foods | SLC Agrcola vs. Minerva 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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