Correlation Between Dhler SA and Companhia Tecidos
Can any of the company-specific risk be diversified away by investing in both Dhler SA and Companhia Tecidos 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 Dhler SA and Companhia Tecidos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dhler SA and Companhia Tecidos Santanense, you can compare the effects of market volatilities on Dhler SA and Companhia Tecidos 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 Dhler SA with a short position of Companhia Tecidos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dhler SA and Companhia Tecidos.
Diversification Opportunities for Dhler SA and Companhia Tecidos
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dhler and Companhia is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dhler SA and Companhia Tecidos Santanense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Tecidos and Dhler 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 Dhler SA are associated (or correlated) with Companhia Tecidos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Tecidos has no effect on the direction of Dhler SA i.e., Dhler SA and Companhia Tecidos go up and down completely randomly.
Pair Corralation between Dhler SA and Companhia Tecidos
Assuming the 90 days trading horizon Dhler SA is expected to generate 0.38 times more return on investment than Companhia Tecidos. However, Dhler SA is 2.63 times less risky than Companhia Tecidos. It trades about -0.04 of its potential returns per unit of risk. Companhia Tecidos Santanense is currently generating about -0.28 per unit of risk. If you would invest 422.00 in Dhler SA on September 12, 2024 and sell it today you would lose (12.00) from holding Dhler SA or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Dhler SA vs. Companhia Tecidos Santanense
Performance |
| Timeline |
| Dhler SA |
| Companhia Tecidos |
Dhler SA and Companhia Tecidos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dhler SA and Companhia Tecidos
The main advantage of trading using opposite Dhler SA and Companhia Tecidos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dhler SA position performs unexpectedly, Companhia Tecidos 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 Companhia Tecidos will offset losses from the drop in Companhia Tecidos' long position.| Dhler SA vs. Companhia de Tecidos | Dhler SA vs. Electro Ao Altona | Dhler SA vs. Companhia Tecidos Santanense | Dhler SA vs. Grazziotin SA |
| Companhia Tecidos vs. Companhia Tecidos Santanense | Companhia Tecidos vs. Companhia de Tecidos | Companhia Tecidos vs. Pettenati SA Industria | Companhia Tecidos vs. Dhler 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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