Correlation Between Camil Alimentos and Indstrias Romi
Can any of the company-specific risk be diversified away by investing in both Camil Alimentos and Indstrias Romi 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 Indstrias Romi 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 Indstrias Romi SA, you can compare the effects of market volatilities on Camil Alimentos and Indstrias Romi 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 Indstrias Romi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camil Alimentos and Indstrias Romi.
Diversification Opportunities for Camil Alimentos and Indstrias Romi
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Camil and Indstrias is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Camil Alimentos SA and Indstrias Romi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indstrias Romi SA 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 Indstrias Romi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indstrias Romi SA has no effect on the direction of Camil Alimentos i.e., Camil Alimentos and Indstrias Romi go up and down completely randomly.
Pair Corralation between Camil Alimentos and Indstrias Romi
Assuming the 90 days trading horizon Camil Alimentos SA is expected to generate 1.35 times more return on investment than Indstrias Romi. However, Camil Alimentos is 1.35 times more volatile than Indstrias Romi SA. It trades about -0.12 of its potential returns per unit of risk. Indstrias Romi SA is currently generating about -0.17 per unit of risk. If you would invest 806.00 in Camil Alimentos SA on August 25, 2024 and sell it today you would lose (34.00) from holding Camil Alimentos SA or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camil Alimentos SA vs. Indstrias Romi SA
Performance |
| Timeline |
| Camil Alimentos SA |
| Indstrias Romi SA |
Camil Alimentos and Indstrias Romi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camil Alimentos and Indstrias Romi
The main advantage of trading using opposite Camil Alimentos and Indstrias Romi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camil Alimentos position performs unexpectedly, Indstrias Romi 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 Indstrias Romi will offset losses from the drop in Indstrias Romi's long position.| Camil Alimentos vs. Minerva SA | Camil Alimentos vs. BRF SA | Camil Alimentos vs. Companhia Siderrgica Nacional | Camil Alimentos vs. Cyrela Brazil Realty |
| Indstrias Romi vs. SLC Agrcola SA | Indstrias Romi vs. Camil Alimentos SA | Indstrias Romi vs. Marcopolo SA | Indstrias Romi vs. Movida Participaes 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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