Correlation Between Caixa Seguridade and Porto Seguro
Can any of the company-specific risk be diversified away by investing in both Caixa Seguridade and Porto Seguro 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 Caixa Seguridade and Porto Seguro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caixa Seguridade Participaes and Porto Seguro SA, you can compare the effects of market volatilities on Caixa Seguridade and Porto Seguro 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 Caixa Seguridade with a short position of Porto Seguro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caixa Seguridade and Porto Seguro.
Diversification Opportunities for Caixa Seguridade and Porto Seguro
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caixa and Porto is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Caixa Seguridade Participaes and Porto Seguro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porto Seguro SA and Caixa Seguridade 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 Caixa Seguridade Participaes are associated (or correlated) with Porto Seguro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porto Seguro SA has no effect on the direction of Caixa Seguridade i.e., Caixa Seguridade and Porto Seguro go up and down completely randomly.
Pair Corralation between Caixa Seguridade and Porto Seguro
Assuming the 90 days trading horizon Caixa Seguridade Participaes is expected to generate 2.05 times more return on investment than Porto Seguro. However, Caixa Seguridade is 2.05 times more volatile than Porto Seguro SA. It trades about 0.14 of its potential returns per unit of risk. Porto Seguro SA is currently generating about 0.05 per unit of risk. If you would invest 1,428 in Caixa Seguridade Participaes on August 29, 2024 and sell it today you would earn a total of 69.00 from holding Caixa Seguridade Participaes or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caixa Seguridade Participaes vs. Porto Seguro SA
Performance |
| Timeline |
| Caixa Seguridade Par |
| Porto Seguro SA |
Caixa Seguridade and Porto Seguro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caixa Seguridade and Porto Seguro
The main advantage of trading using opposite Caixa Seguridade and Porto Seguro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caixa Seguridade position performs unexpectedly, Porto Seguro 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 Porto Seguro will offset losses from the drop in Porto Seguro's long position.| Caixa Seguridade vs. Porto Seguro SA | Caixa Seguridade vs. Energisa SA | Caixa Seguridade vs. BTG Pactual Logstica | Caixa Seguridade vs. Plano Plano Desenvolvimento |
| Porto Seguro vs. Banco Alfa de | Porto Seguro vs. Banco Alfa de | Porto Seguro vs. Financeira Alfa SA | Porto Seguro vs. Alfa Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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