Correlation Between Gafisa SA and Odontoprev
Can any of the company-specific risk be diversified away by investing in both Gafisa SA and Odontoprev 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 Gafisa SA and Odontoprev into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gafisa SA and Odontoprev SA, you can compare the effects of market volatilities on Gafisa SA and Odontoprev 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 Gafisa SA with a short position of Odontoprev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gafisa SA and Odontoprev.
Diversification Opportunities for Gafisa SA and Odontoprev
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gafisa and Odontoprev is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gafisa SA and Odontoprev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odontoprev SA and Gafisa 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 Gafisa SA are associated (or correlated) with Odontoprev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odontoprev SA has no effect on the direction of Gafisa SA i.e., Gafisa SA and Odontoprev go up and down completely randomly.
Pair Corralation between Gafisa SA and Odontoprev
Assuming the 90 days trading horizon Gafisa SA is expected to under-perform the Odontoprev. In addition to that, Gafisa SA is 3.15 times more volatile than Odontoprev SA. It trades about -0.01 of its total potential returns per unit of risk. Odontoprev SA is currently generating about 0.04 per unit of volatility. If you would invest 734.00 in Odontoprev SA on August 23, 2024 and sell it today you would earn a total of 317.00 from holding Odontoprev SA or generate 43.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gafisa SA vs. Odontoprev SA
Performance |
| Timeline |
| Gafisa SA |
| Odontoprev SA |
Gafisa SA and Odontoprev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gafisa SA and Odontoprev
The main advantage of trading using opposite Gafisa SA and Odontoprev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gafisa SA position performs unexpectedly, Odontoprev 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 Odontoprev will offset losses from the drop in Odontoprev's long position.| Gafisa SA vs. Rossi Residencial SA | Gafisa SA vs. Cyrela Brazil Realty | Gafisa SA vs. BTG Pactual Logstica | Gafisa SA vs. Plano Plano Desenvolvimento |
| Odontoprev vs. Natura Co Holding | Odontoprev vs. Raia Drogasil SA | Odontoprev vs. Qualicorp Consultoria e | Odontoprev vs. Localiza Rent a |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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