Correlation Between Electro Ao and Grazziotin
Can any of the company-specific risk be diversified away by investing in both Electro Ao and Grazziotin 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 Electro Ao and Grazziotin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electro Ao Altona and Grazziotin SA, you can compare the effects of market volatilities on Electro Ao and Grazziotin 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 Electro Ao with a short position of Grazziotin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electro Ao and Grazziotin.
Diversification Opportunities for Electro Ao and Grazziotin
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electro and Grazziotin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Electro Ao Altona and Grazziotin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grazziotin SA and Electro Ao 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 Electro Ao Altona are associated (or correlated) with Grazziotin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grazziotin SA has no effect on the direction of Electro Ao i.e., Electro Ao and Grazziotin go up and down completely randomly.
Pair Corralation between Electro Ao and Grazziotin
Assuming the 90 days trading horizon Electro Ao Altona is expected to generate 0.99 times more return on investment than Grazziotin. However, Electro Ao Altona is 1.01 times less risky than Grazziotin. It trades about 0.07 of its potential returns per unit of risk. Grazziotin SA is currently generating about 0.02 per unit of risk. If you would invest 638.00 in Electro Ao Altona on September 14, 2024 and sell it today you would earn a total of 682.00 from holding Electro Ao Altona or generate 106.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electro Ao Altona vs. Grazziotin SA
Performance |
| Timeline |
| Electro Ao Altona |
| Grazziotin SA |
Electro Ao and Grazziotin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electro Ao and Grazziotin
The main advantage of trading using opposite Electro Ao and Grazziotin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electro Ao position performs unexpectedly, Grazziotin 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 Grazziotin will offset losses from the drop in Grazziotin's long position.| Electro Ao vs. Usinas Siderrgicas de | Electro Ao vs. Gerdau SA | Electro Ao vs. Companhia Siderrgica Nacional | Electro Ao vs. Companhia Energtica de |
| Grazziotin vs. Grazziotin SA | Grazziotin vs. Cia de Ferro | Grazziotin vs. Banco ABC Brasil | Grazziotin vs. Grendene 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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