Correlation Between Cogna Educao and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both Cogna Educao and BB Seguridade 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 Cogna Educao and BB Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogna Educao SA and BB Seguridade Participacoes, you can compare the effects of market volatilities on Cogna Educao and BB Seguridade 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 Cogna Educao with a short position of BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogna Educao and BB Seguridade.
Diversification Opportunities for Cogna Educao and BB Seguridade
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cogna and BBSE3 is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cogna Educao SA and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic and Cogna Educao 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 Cogna Educao SA are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Cogna Educao i.e., Cogna Educao and BB Seguridade go up and down completely randomly.
Pair Corralation between Cogna Educao and BB Seguridade
Assuming the 90 days trading horizon Cogna Educao SA is expected to generate 4.39 times more return on investment than BB Seguridade. However, Cogna Educao is 4.39 times more volatile than BB Seguridade Participacoes. It trades about 0.0 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about -0.11 per unit of risk. If you would invest 142.00 in Cogna Educao SA on August 30, 2024 and sell it today you would lose (3.00) from holding Cogna Educao SA or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogna Educao SA vs. BB Seguridade Participacoes
Performance |
| Timeline |
| Cogna Educao SA |
| BB Seguridade Partic |
Cogna Educao and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogna Educao and BB Seguridade
The main advantage of trading using opposite Cogna Educao and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogna Educao position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| Cogna Educao vs. Yduqs Participaes SA | Cogna Educao vs. GAEC Educacao SA | Cogna Educao vs. Ser Educacional Sa |
| BB Seguridade vs. Cogna Educao SA | BB Seguridade vs. CVC Brasil Operadora | BB Seguridade vs. Oi SA | BB Seguridade vs. Azul 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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