Correlation Between Cable One and Guararapes Confeces
Can any of the company-specific risk be diversified away by investing in both Cable One and Guararapes Confeces 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 Cable One and Guararapes Confeces into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Guararapes Confeces SA, you can compare the effects of market volatilities on Cable One and Guararapes Confeces 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 Cable One with a short position of Guararapes Confeces. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Guararapes Confeces.
Diversification Opportunities for Cable One and Guararapes Confeces
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cable and Guararapes is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Guararapes Confeces SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guararapes Confeces and Cable One 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 Cable One are associated (or correlated) with Guararapes Confeces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guararapes Confeces has no effect on the direction of Cable One i.e., Cable One and Guararapes Confeces go up and down completely randomly.
Pair Corralation between Cable One and Guararapes Confeces
Assuming the 90 days trading horizon Cable One is expected to under-perform the Guararapes Confeces. In addition to that, Cable One is 1.18 times more volatile than Guararapes Confeces SA. It trades about -0.33 of its total potential returns per unit of risk. Guararapes Confeces SA is currently generating about -0.06 per unit of volatility. If you would invest 639.00 in Guararapes Confeces SA on November 29, 2024 and sell it today you would lose (37.00) from holding Guararapes Confeces SA or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Guararapes Confeces SA
Performance |
| Timeline |
| Cable One |
| Guararapes Confeces |
Cable One and Guararapes Confeces Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Guararapes Confeces
The main advantage of trading using opposite Cable One and Guararapes Confeces positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Guararapes Confeces 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 Guararapes Confeces will offset losses from the drop in Guararapes Confeces' long position.| Cable One vs. Waste Management | Cable One vs. Verizon Communications | Cable One vs. Nordon Indstrias Metalrgicas | Cable One vs. Hormel Foods |
| Guararapes Confeces vs. Lojas Renner SA | Guararapes Confeces vs. Marisa Lojas SA | Guararapes Confeces vs. Vulcabras Azaleia SA | Guararapes Confeces vs. Alpargatas 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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