Correlation Between Gol Linhas and Oi SA
Can any of the company-specific risk be diversified away by investing in both Gol Linhas and Oi 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 Gol Linhas and Oi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gol Linhas Areas and Oi SA, you can compare the effects of market volatilities on Gol Linhas and Oi 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 Gol Linhas with a short position of Oi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gol Linhas and Oi SA.
Diversification Opportunities for Gol Linhas and Oi SA
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gol and OIBR4 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gol Linhas Areas and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA and Gol Linhas 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 Gol Linhas Areas are associated (or correlated) with Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of Gol Linhas i.e., Gol Linhas and Oi SA go up and down completely randomly.
Pair Corralation between Gol Linhas and Oi SA
Assuming the 90 days trading horizon Gol Linhas Areas is expected to under-perform the Oi SA. But the preferred stock apears to be less risky and, when comparing its historical volatility, Gol Linhas Areas is 25.36 times less risky than Oi SA. The preferred stock trades about -0.06 of its potential returns per unit of risk. The Oi SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,020 in Oi SA on August 27, 2024 and sell it today you would lose (1,980) from holding Oi SA or give up 65.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Gol Linhas Areas vs. Oi SA
Performance |
| Timeline |
| Gol Linhas Areas |
| Oi SA |
Gol Linhas and Oi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gol Linhas and Oi SA
The main advantage of trading using opposite Gol Linhas and Oi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gol Linhas position performs unexpectedly, Oi 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 Oi SA will offset losses from the drop in Oi SA's long position.| Gol Linhas vs. Fras le SA | Gol Linhas vs. Indstrias Romi SA | Gol Linhas vs. Clave Indices De | Gol Linhas vs. BTG Pactual Logstica |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |