Correlation Between GPS Participaes and Lojas Quero
Can any of the company-specific risk be diversified away by investing in both GPS Participaes and Lojas Quero 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 GPS Participaes and Lojas Quero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GPS Participaes e and Lojas Quero Quero SA, you can compare the effects of market volatilities on GPS Participaes and Lojas Quero 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 GPS Participaes with a short position of Lojas Quero. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPS Participaes and Lojas Quero.
Diversification Opportunities for GPS Participaes and Lojas Quero
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GPS and Lojas is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding GPS Participaes e and Lojas Quero Quero SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Quero Quero and GPS Participaes 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 GPS Participaes e are associated (or correlated) with Lojas Quero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Quero Quero has no effect on the direction of GPS Participaes i.e., GPS Participaes and Lojas Quero go up and down completely randomly.
Pair Corralation between GPS Participaes and Lojas Quero
Assuming the 90 days trading horizon GPS Participaes e is expected to generate 0.83 times more return on investment than Lojas Quero. However, GPS Participaes e is 1.21 times less risky than Lojas Quero. It trades about -0.09 of its potential returns per unit of risk. Lojas Quero Quero SA is currently generating about -0.18 per unit of risk. If you would invest 1,444 in GPS Participaes e on October 20, 2024 and sell it today you would lose (60.00) from holding GPS Participaes e or give up 4.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GPS Participaes e vs. Lojas Quero Quero SA
Performance |
| Timeline |
| GPS Participaes e |
| Lojas Quero Quero |
GPS Participaes and Lojas Quero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GPS Participaes and Lojas Quero
The main advantage of trading using opposite GPS Participaes and Lojas Quero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPS Participaes position performs unexpectedly, Lojas Quero 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 Lojas Quero will offset losses from the drop in Lojas Quero's long position.| GPS Participaes vs. Taiwan Semiconductor Manufacturing | GPS Participaes vs. Apple Inc | GPS Participaes vs. Alibaba Group Holding | GPS Participaes vs. Microsoft |
| Lojas Quero vs. Pet Center Comrcio | Lojas Quero vs. Mitre Realty Empreendimentos | Lojas Quero vs. Mliuz SA | Lojas Quero vs. Direcional Engenharia 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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