Correlation Between Camil Alimentos and M Dias
Can any of the company-specific risk be diversified away by investing in both Camil Alimentos and M Dias 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 Camil Alimentos and M Dias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camil Alimentos SA and M Dias Branco, you can compare the effects of market volatilities on Camil Alimentos and M Dias 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 Camil Alimentos with a short position of M Dias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camil Alimentos and M Dias.
Diversification Opportunities for Camil Alimentos and M Dias
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Camil and MDIA3 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Camil Alimentos SA and M Dias Branco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Dias Branco and Camil Alimentos 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 Camil Alimentos SA are associated (or correlated) with M Dias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Dias Branco has no effect on the direction of Camil Alimentos i.e., Camil Alimentos and M Dias go up and down completely randomly.
Pair Corralation between Camil Alimentos and M Dias
Assuming the 90 days trading horizon Camil Alimentos SA is expected to generate 0.52 times more return on investment than M Dias. However, Camil Alimentos SA is 1.93 times less risky than M Dias. It trades about -0.14 of its potential returns per unit of risk. M Dias Branco is currently generating about -0.17 per unit of risk. If you would invest 797.00 in Camil Alimentos SA on August 30, 2024 and sell it today you would lose (38.00) from holding Camil Alimentos SA or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Camil Alimentos SA vs. M Dias Branco
Performance |
| Timeline |
| Camil Alimentos SA |
| M Dias Branco |
Camil Alimentos and M Dias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camil Alimentos and M Dias
The main advantage of trading using opposite Camil Alimentos and M Dias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camil Alimentos position performs unexpectedly, M Dias 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 M Dias will offset losses from the drop in M Dias' long position.| Camil Alimentos vs. BRF SA | Camil Alimentos vs. Companhia Siderrgica Nacional | Camil Alimentos vs. Cyrela Brazil Realty |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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