Correlation Between CVC Brasil and Magazine Luiza
Can any of the company-specific risk be diversified away by investing in both CVC Brasil and Magazine Luiza 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 CVC Brasil and Magazine Luiza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVC Brasil Operadora and Magazine Luiza SA, you can compare the effects of market volatilities on CVC Brasil and Magazine Luiza 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 CVC Brasil with a short position of Magazine Luiza. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVC Brasil and Magazine Luiza.
Diversification Opportunities for CVC Brasil and Magazine Luiza
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVC and Magazine is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CVC Brasil Operadora and Magazine Luiza SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magazine Luiza SA and CVC Brasil 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 CVC Brasil Operadora are associated (or correlated) with Magazine Luiza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magazine Luiza SA has no effect on the direction of CVC Brasil i.e., CVC Brasil and Magazine Luiza go up and down completely randomly.
Pair Corralation between CVC Brasil and Magazine Luiza
Assuming the 90 days trading horizon CVC Brasil Operadora is expected to under-perform the Magazine Luiza. But the stock apears to be less risky and, when comparing its historical volatility, CVC Brasil Operadora is 8.98 times less risky than Magazine Luiza. The stock trades about 0.0 of its potential returns per unit of risk. The Magazine Luiza SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,940 in Magazine Luiza SA on August 28, 2024 and sell it today you would lose (1,939) from holding Magazine Luiza SA or give up 65.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CVC Brasil Operadora vs. Magazine Luiza SA
Performance |
| Timeline |
| CVC Brasil Operadora |
| Magazine Luiza SA |
CVC Brasil and Magazine Luiza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVC Brasil and Magazine Luiza
The main advantage of trading using opposite CVC Brasil and Magazine Luiza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVC Brasil position performs unexpectedly, Magazine Luiza 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 Magazine Luiza will offset losses from the drop in Magazine Luiza's long position.| CVC Brasil vs. Baidu Inc | CVC Brasil vs. Deutsche Bank Aktiengesellschaft | CVC Brasil vs. HSBC Holdings plc | CVC Brasil vs. The Bank of |
| Magazine Luiza vs. Baidu Inc | Magazine Luiza vs. Deutsche Bank Aktiengesellschaft | Magazine Luiza vs. HSBC Holdings plc | Magazine Luiza vs. The Bank of |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |