Correlation Between Companhia Brasileira and Hoteles City

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Can any of the company-specific risk be diversified away by investing in both Companhia Brasileira and Hoteles City 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 Companhia Brasileira and Hoteles City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Brasileira de and Hoteles City Express, you can compare the effects of market volatilities on Companhia Brasileira and Hoteles City 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 Companhia Brasileira with a short position of Hoteles City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Brasileira and Hoteles City.

Diversification Opportunities for Companhia Brasileira and Hoteles City

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Companhia and Hoteles is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Brasileira de and Hoteles City Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoteles City Express and Companhia Brasileira 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 Companhia Brasileira de are associated (or correlated) with Hoteles City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoteles City Express has no effect on the direction of Companhia Brasileira i.e., Companhia Brasileira and Hoteles City go up and down completely randomly.

Pair Corralation between Companhia Brasileira and Hoteles City

If you would invest  1,360  in Companhia Brasileira de on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Companhia Brasileira de or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Companhia Brasileira de  vs.  Hoteles City Express

 Performance 
       Timeline  
Companhia Brasileira 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Companhia Brasileira de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Companhia Brasileira is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Hoteles City Express 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Hoteles City Express are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Hoteles City is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Companhia Brasileira and Hoteles City Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Companhia Brasileira and Hoteles City

The main advantage of trading using opposite Companhia Brasileira and Hoteles City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Brasileira position performs unexpectedly, Hoteles City 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 Hoteles City will offset losses from the drop in Hoteles City's long position.
The idea behind Companhia Brasileira de and Hoteles City Express pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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