Correlation Between Cosan SA and Illumina
Can any of the company-specific risk be diversified away by investing in both Cosan SA and Illumina 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 Illumina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA and Illumina, you can compare the effects of market volatilities on Cosan SA and Illumina 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 Illumina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and Illumina.
Diversification Opportunities for Cosan SA and Illumina
Pay attention - limited upside
The 3 months correlation between Cosan and Illumina is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA and Illumina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illumina 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 Illumina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illumina has no effect on the direction of Cosan SA i.e., Cosan SA and Illumina go up and down completely randomly.
Pair Corralation between Cosan SA and Illumina
Assuming the 90 days trading horizon Cosan SA is expected to under-perform the Illumina. But the stock apears to be less risky and, when comparing its historical volatility, Cosan SA is 1.1 times less risky than Illumina. The stock trades about -0.04 of its potential returns per unit of risk. The Illumina is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 20,079 in Illumina on September 14, 2024 and sell it today you would lose (2,468) from holding Illumina or give up 12.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Cosan SA vs. Illumina
Performance |
| Timeline |
| Cosan SA |
| Illumina |
Cosan SA and Illumina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and Illumina
The main advantage of trading using opposite Cosan SA and Illumina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, Illumina 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 Illumina will offset losses from the drop in Illumina's long position.| Cosan SA vs. PDG Realty SA | Cosan SA vs. Positivo Tecnologia SA | Cosan SA vs. Rossi Residencial SA | Cosan SA vs. Gafisa SA |
| Illumina vs. CTEEP Companhia | Illumina vs. Cosan SA | Illumina vs. Telefnica Brasil SA | Illumina vs. Energisa 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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