Correlation Between Companhia Tecidos and Dhler SA
Can any of the company-specific risk be diversified away by investing in both Companhia Tecidos and Dhler 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 Companhia Tecidos and Dhler SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Tecidos Santanense and Dhler SA, you can compare the effects of market volatilities on Companhia Tecidos and Dhler 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 Companhia Tecidos with a short position of Dhler SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Tecidos and Dhler SA.
Diversification Opportunities for Companhia Tecidos and Dhler SA
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Companhia and Dhler is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Tecidos Santanense and Dhler SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dhler SA and Companhia Tecidos 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 Tecidos Santanense are associated (or correlated) with Dhler SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dhler SA has no effect on the direction of Companhia Tecidos i.e., Companhia Tecidos and Dhler SA go up and down completely randomly.
Pair Corralation between Companhia Tecidos and Dhler SA
Assuming the 90 days trading horizon Companhia Tecidos Santanense is expected to under-perform the Dhler SA. In addition to that, Companhia Tecidos is 2.12 times more volatile than Dhler SA. It trades about -0.08 of its total potential returns per unit of risk. Dhler SA is currently generating about -0.04 per unit of volatility. If you would invest 499.00 in Dhler SA on November 4, 2024 and sell it today you would lose (84.00) from holding Dhler SA or give up 16.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Companhia Tecidos Santanense vs. Dhler SA
Performance |
| Timeline |
| Companhia Tecidos |
| Dhler SA |
Companhia Tecidos and Dhler SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Tecidos and Dhler SA
The main advantage of trading using opposite Companhia Tecidos and Dhler SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Tecidos position performs unexpectedly, Dhler 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 Dhler SA will offset losses from the drop in Dhler SA's long position.| Companhia Tecidos vs. PBG SA | Companhia Tecidos vs. Guararapes Confeces SA | Companhia Tecidos vs. Tupy SA | Companhia Tecidos vs. Grendene SA |
| Dhler SA vs. Companhia de Tecidos | Dhler SA vs. Electro Ao Altona | Dhler SA vs. Companhia Tecidos Santanense | Dhler SA vs. Grazziotin 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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