Correlation Between Grendene and Alpargatas
Can any of the company-specific risk be diversified away by investing in both Grendene and Alpargatas 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 Grendene and Alpargatas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grendene SA and Alpargatas SA, you can compare the effects of market volatilities on Grendene and Alpargatas 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 Grendene with a short position of Alpargatas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grendene and Alpargatas.
Diversification Opportunities for Grendene and Alpargatas
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grendene and Alpargatas is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grendene SA and Alpargatas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpargatas SA and Grendene 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 Grendene SA are associated (or correlated) with Alpargatas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpargatas SA has no effect on the direction of Grendene i.e., Grendene and Alpargatas go up and down completely randomly.
Pair Corralation between Grendene and Alpargatas
Assuming the 90 days trading horizon Grendene SA is expected to under-perform the Alpargatas. But the stock apears to be less risky and, when comparing its historical volatility, Grendene SA is 1.48 times less risky than Alpargatas. The stock trades about -0.01 of its potential returns per unit of risk. The Alpargatas SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 846.00 in Alpargatas SA on January 24, 2025 and sell it today you would lose (132.00) from holding Alpargatas SA or give up 15.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grendene SA vs. Alpargatas SA
Performance |
| Timeline |
| Grendene SA |
| Alpargatas SA |
Grendene and Alpargatas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grendene and Alpargatas
The main advantage of trading using opposite Grendene and Alpargatas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grendene position performs unexpectedly, Alpargatas 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 Alpargatas will offset losses from the drop in Alpargatas' long position.| Grendene vs. M Dias Branco | Grendene vs. Fleury SA | Grendene vs. Engie Brasil Energia | Grendene vs. Odontoprev SA |
| Alpargatas vs. Inepar SA Indstria | Alpargatas vs. Lupatech SA | Alpargatas vs. Paranapanema SA | Alpargatas vs. Plascar Participaes Industriais |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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