Correlation Between Eternit SA and Bombril SA
Can any of the company-specific risk be diversified away by investing in both Eternit SA and Bombril 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 Eternit SA and Bombril SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eternit SA and Bombril SA, you can compare the effects of market volatilities on Eternit SA and Bombril 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 Eternit SA with a short position of Bombril SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eternit SA and Bombril SA.
Diversification Opportunities for Eternit SA and Bombril SA
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eternit and Bombril is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Eternit SA and Bombril SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombril SA and Eternit 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 Eternit SA are associated (or correlated) with Bombril SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombril SA has no effect on the direction of Eternit SA i.e., Eternit SA and Bombril SA go up and down completely randomly.
Pair Corralation between Eternit SA and Bombril SA
Assuming the 90 days trading horizon Eternit SA is expected to generate 1.03 times more return on investment than Bombril SA. However, Eternit SA is 1.03 times more volatile than Bombril SA. It trades about 0.38 of its potential returns per unit of risk. Bombril SA is currently generating about -0.29 per unit of risk. If you would invest 512.00 in Eternit SA on August 30, 2024 and sell it today you would earn a total of 119.00 from holding Eternit SA or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eternit SA vs. Bombril SA
Performance |
| Timeline |
| Eternit SA |
| Bombril SA |
Eternit SA and Bombril SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eternit SA and Bombril SA
The main advantage of trading using opposite Eternit SA and Bombril SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eternit SA position performs unexpectedly, Bombril 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 Bombril SA will offset losses from the drop in Bombril SA's long position.| Eternit SA vs. Marcopolo SA | Eternit SA vs. Randon SA Implementos | Eternit SA vs. Companhia Siderrgica Nacional | Eternit SA vs. Positivo Tecnologia SA |
| Bombril SA vs. Eternit SA | Bombril SA vs. Lupatech SA | Bombril SA vs. Inepar SA Indstria | Bombril SA vs. Marcopolo 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |