Correlation Between CA Modas and Baumer SA
Can any of the company-specific risk be diversified away by investing in both CA Modas and Baumer 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 CA Modas and Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CA Modas SA and Baumer SA, you can compare the effects of market volatilities on CA Modas and Baumer 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 CA Modas with a short position of Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Modas and Baumer SA.
Diversification Opportunities for CA Modas and Baumer SA
Very good diversification
The 3 months correlation between CEAB3 and Baumer is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CA Modas SA and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and CA Modas 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 CA Modas SA are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of CA Modas i.e., CA Modas and Baumer SA go up and down completely randomly.
Pair Corralation between CA Modas and Baumer SA
If you would invest 1,030 in Baumer SA on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Baumer SA or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
CA Modas SA vs. Baumer SA
Performance |
| Timeline |
| CA Modas SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Baumer SA |
CA Modas and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CA Modas and Baumer SA
The main advantage of trading using opposite CA Modas and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Modas position performs unexpectedly, Baumer 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 Baumer SA will offset losses from the drop in Baumer SA's long position.The idea behind CA Modas SA and Baumer SA 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.| Baumer SA vs. Baumer SA | Baumer SA vs. Biomm SA | Baumer SA vs. Banco Alfa de | Baumer SA vs. Banco da Amaznia |
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 Correlations module to find global opportunities by holding instruments from different markets.
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