Correlation Between Companhia and Inepar SA
Can any of the company-specific risk be diversified away by investing in both Companhia and Inepar 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 Companhia and Inepar SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia de Gs and Inepar SA Indstria, you can compare the effects of market volatilities on Companhia and Inepar 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 Companhia with a short position of Inepar SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia and Inepar SA.
Diversification Opportunities for Companhia and Inepar SA
Good diversification
The 3 months correlation between Companhia and Inepar is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Companhia de Gs and Inepar SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inepar SA Indstria and Companhia 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 de Gs are associated (or correlated) with Inepar SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inepar SA Indstria has no effect on the direction of Companhia i.e., Companhia and Inepar SA go up and down completely randomly.
Pair Corralation between Companhia and Inepar SA
Assuming the 90 days trading horizon Companhia de Gs is expected to under-perform the Inepar SA. In addition to that, Companhia is 1.45 times more volatile than Inepar SA Indstria. It trades about -0.04 of its total potential returns per unit of risk. Inepar SA Indstria is currently generating about -0.03 per unit of volatility. If you would invest 145.00 in Inepar SA Indstria on November 28, 2024 and sell it today you would lose (4.00) from holding Inepar SA Indstria or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Companhia de Gs vs. Inepar SA Indstria
Performance |
| Timeline |
| Companhia de Gs |
| Inepar SA Indstria |
Companhia and Inepar SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia and Inepar SA
The main advantage of trading using opposite Companhia and Inepar SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia position performs unexpectedly, Inepar 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 Inepar SA will offset losses from the drop in Inepar SA's long position.| Companhia vs. Companhia de Gs | Companhia vs. Braskem SA | Companhia vs. Companhia Paranaense de | Companhia vs. Companhia Energtica de |
| Inepar SA vs. Inepar SA Indstria | Inepar SA vs. Lupatech SA | Inepar SA vs. Triunfo Participaes e | Inepar SA vs. Viver Incorporadora e |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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