Correlation Between CCR SA and Embraer SA
Can any of the company-specific risk be diversified away by investing in both CCR SA and Embraer SA 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 CCR SA and Embraer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCR SA and Embraer SA, you can compare the effects of market volatilities on CCR SA and Embraer SA 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 CCR SA with a short position of Embraer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCR SA and Embraer SA.
Diversification Opportunities for CCR SA and Embraer SA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CCR and Embraer is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CCR SA and Embraer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embraer SA and CCR 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 CCR SA are associated (or correlated) with Embraer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embraer SA has no effect on the direction of CCR SA i.e., CCR SA and Embraer SA go up and down completely randomly.
Pair Corralation between CCR SA and Embraer SA
Assuming the 90 days trading horizon CCR SA is expected to under-perform the Embraer SA. But the stock apears to be less risky and, when comparing its historical volatility, CCR SA is 1.19 times less risky than Embraer SA. The stock trades about -0.19 of its potential returns per unit of risk. The Embraer SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 5,012 in Embraer SA on August 30, 2024 and sell it today you would earn a total of 654.00 from holding Embraer SA or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCR SA vs. Embraer SA
Performance |
| Timeline |
| CCR SA |
| Embraer SA |
CCR SA and Embraer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCR SA and Embraer SA
The main advantage of trading using opposite CCR SA and Embraer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCR SA position performs unexpectedly, Embraer SA 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 Embraer SA will offset losses from the drop in Embraer SA's long position.| CCR SA vs. EcoRodovias Infraestrutura e | CCR SA vs. Companhia de Saneamento | CCR SA vs. Companhia Energtica de | CCR SA vs. Cosan SA |
| Embraer SA vs. METISA Metalrgica Timboense | Embraer SA vs. Lupatech SA | Embraer SA vs. Refinaria de Petrleos | Embraer SA vs. Recrusul 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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