Correlation Between Companhia and Panatlntica
Can any of the company-specific risk be diversified away by investing in both Companhia and Panatlntica 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 Panatlntica 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 Panatlntica SA, you can compare the effects of market volatilities on Companhia and Panatlntica 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 Panatlntica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia and Panatlntica.
Diversification Opportunities for Companhia and Panatlntica
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Panatlntica is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Companhia de Gs and Panatlntica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panatlntica SA 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 Panatlntica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panatlntica SA has no effect on the direction of Companhia i.e., Companhia and Panatlntica go up and down completely randomly.
Pair Corralation between Companhia and Panatlntica
Assuming the 90 days trading horizon Companhia de Gs is expected to generate 1.18 times more return on investment than Panatlntica. However, Companhia is 1.18 times more volatile than Panatlntica SA. It trades about 0.04 of its potential returns per unit of risk. Panatlntica SA is currently generating about 0.01 per unit of risk. If you would invest 10,449 in Companhia de Gs on August 27, 2024 and sell it today you would earn a total of 1,555 from holding Companhia de Gs or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.81% |
| Values | Daily Returns |
Companhia de Gs vs. Panatlntica SA
Performance |
| Timeline |
| Companhia de Gs |
| Panatlntica SA |
Companhia and Panatlntica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia and Panatlntica
The main advantage of trading using opposite Companhia and Panatlntica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia position performs unexpectedly, Panatlntica 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 Panatlntica will offset losses from the drop in Panatlntica's long position.| Companhia vs. Companhia de Gs | Companhia vs. Braskem SA | Companhia vs. Companhia Paranaense de | Companhia vs. Companhia Energtica de |
| Panatlntica vs. Companhia de Gs | Panatlntica vs. CTEEP Companhia | Panatlntica vs. Rio Paranapanema Energia | Panatlntica vs. Nordon Indstrias Metalrgicas |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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