Correlation Between Grazziotin and Electro Ao
Can any of the company-specific risk be diversified away by investing in both Grazziotin and Electro Ao 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 Grazziotin and Electro Ao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grazziotin SA and Electro Ao Altona, you can compare the effects of market volatilities on Grazziotin and Electro Ao 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 Grazziotin with a short position of Electro Ao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grazziotin and Electro Ao.
Diversification Opportunities for Grazziotin and Electro Ao
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grazziotin and Electro is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Grazziotin SA and Electro Ao Altona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Ao Altona and Grazziotin 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 Grazziotin SA are associated (or correlated) with Electro Ao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Ao Altona has no effect on the direction of Grazziotin i.e., Grazziotin and Electro Ao go up and down completely randomly.
Pair Corralation between Grazziotin and Electro Ao
Assuming the 90 days trading horizon Grazziotin is expected to generate 3.53 times less return on investment than Electro Ao. In addition to that, Grazziotin is 1.01 times more volatile than Electro Ao Altona. It trades about 0.02 of its total potential returns per unit of risk. Electro Ao Altona is currently generating about 0.07 per unit of volatility. If you would invest 638.00 in Electro Ao Altona on September 14, 2024 and sell it today you would earn a total of 682.00 from holding Electro Ao Altona or generate 106.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grazziotin SA vs. Electro Ao Altona
Performance |
| Timeline |
| Grazziotin SA |
| Electro Ao Altona |
Grazziotin and Electro Ao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grazziotin and Electro Ao
The main advantage of trading using opposite Grazziotin and Electro Ao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grazziotin position performs unexpectedly, Electro Ao 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 Electro Ao will offset losses from the drop in Electro Ao's long position.| Grazziotin vs. Grazziotin SA | Grazziotin vs. Cia de Ferro | Grazziotin vs. Banco ABC Brasil | Grazziotin vs. Grendene SA |
| Electro Ao vs. Usinas Siderrgicas de | Electro Ao vs. Gerdau SA | Electro Ao vs. Companhia Siderrgica Nacional | Electro Ao vs. Companhia Energtica de |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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