Correlation Between Cosan SA and CCR SA
Can any of the company-specific risk be diversified away by investing in both Cosan SA and CCR 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 Cosan SA and CCR SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA and CCR SA, you can compare the effects of market volatilities on Cosan SA and CCR 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 Cosan SA with a short position of CCR SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and CCR SA.
Diversification Opportunities for Cosan SA and CCR SA
Poor diversification
The 3 months correlation between Cosan and CCR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA and CCR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCR SA and Cosan SA 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 Cosan SA are associated (or correlated) with CCR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCR SA has no effect on the direction of Cosan SA i.e., Cosan SA and CCR SA go up and down completely randomly.
Pair Corralation between Cosan SA and CCR SA
Assuming the 90 days trading horizon Cosan SA is expected to under-perform the CCR SA. In addition to that, Cosan SA is 1.25 times more volatile than CCR SA. It trades about -0.03 of its total potential returns per unit of risk. CCR SA is currently generating about 0.02 per unit of volatility. If you would invest 1,083 in CCR SA on August 27, 2024 and sell it today you would earn a total of 122.00 from holding CCR SA or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosan SA vs. CCR SA
Performance |
| Timeline |
| Cosan SA |
| CCR SA |
Cosan SA and CCR SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and CCR SA
The main advantage of trading using opposite Cosan SA and CCR SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, CCR 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 CCR SA will offset losses from the drop in CCR SA's long position.| Cosan SA vs. Mitsubishi UFJ Financial | Cosan SA vs. Sumitomo Mitsui Financial | Cosan SA vs. Toyota Motor | Cosan SA vs. Banco Santander Chile |
| CCR SA vs. EcoRodovias Infraestrutura e | CCR SA vs. Companhia de Saneamento | CCR SA vs. Companhia Energtica de | CCR SA vs. Cosan 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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