Correlation Between Grendene and Trisul SA
Can any of the company-specific risk be diversified away by investing in both Grendene and Trisul 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 Grendene and Trisul SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grendene SA and Trisul SA, you can compare the effects of market volatilities on Grendene and Trisul 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 Grendene with a short position of Trisul SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grendene and Trisul SA.
Diversification Opportunities for Grendene and Trisul SA
Modest diversification
The 3 months correlation between Grendene and Trisul is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Grendene SA and Trisul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisul 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 Trisul SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisul SA has no effect on the direction of Grendene i.e., Grendene and Trisul SA go up and down completely randomly.
Pair Corralation between Grendene and Trisul SA
Assuming the 90 days trading horizon Grendene is expected to generate 12.73 times less return on investment than Trisul SA. But when comparing it to its historical volatility, Grendene SA is 1.26 times less risky than Trisul SA. It trades about 0.01 of its potential returns per unit of risk. Trisul SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 462.00 in Trisul SA on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Trisul SA or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grendene SA vs. Trisul SA
Performance |
| Timeline |
| Grendene SA |
| Trisul SA |
Grendene and Trisul SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grendene and Trisul SA
The main advantage of trading using opposite Grendene and Trisul SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grendene position performs unexpectedly, Trisul 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 Trisul SA will offset losses from the drop in Trisul SA's long position.| Grendene vs. M Dias Branco | Grendene vs. Fleury SA | Grendene vs. Engie Brasil Energia | Grendene vs. Odontoprev SA |
| Trisul SA vs. JHSF Participaes SA | Trisul SA vs. Helbor Empreendimentos SA | Trisul SA vs. Even Construtora e | Trisul SA vs. EZTEC Empreendimentos e |
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.
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