Correlation Between Grendene and Unicasa Indstria
Can any of the company-specific risk be diversified away by investing in both Grendene and Unicasa Indstria 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 Unicasa Indstria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grendene SA and Unicasa Indstria de, you can compare the effects of market volatilities on Grendene and Unicasa Indstria 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 Unicasa Indstria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grendene and Unicasa Indstria.
Diversification Opportunities for Grendene and Unicasa Indstria
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grendene and Unicasa is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Grendene SA and Unicasa Indstria de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicasa Indstria 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 Unicasa Indstria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicasa Indstria has no effect on the direction of Grendene i.e., Grendene and Unicasa Indstria go up and down completely randomly.
Pair Corralation between Grendene and Unicasa Indstria
Assuming the 90 days trading horizon Grendene SA is expected to generate 0.8 times more return on investment than Unicasa Indstria. However, Grendene SA is 1.25 times less risky than Unicasa Indstria. It trades about -0.04 of its potential returns per unit of risk. Unicasa Indstria de is currently generating about -0.05 per unit of risk. If you would invest 616.00 in Grendene SA on September 4, 2024 and sell it today you would lose (101.00) from holding Grendene SA or give up 16.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grendene SA vs. Unicasa Indstria de
Performance |
| Timeline |
| Grendene SA |
| Unicasa Indstria |
Grendene and Unicasa Indstria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grendene and Unicasa Indstria
The main advantage of trading using opposite Grendene and Unicasa Indstria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grendene position performs unexpectedly, Unicasa Indstria 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 Unicasa Indstria will offset losses from the drop in Unicasa Indstria's long position.| Grendene vs. M Dias Branco | Grendene vs. Fleury SA | Grendene vs. Engie Brasil Energia | Grendene vs. Odontoprev SA |
| Unicasa Indstria vs. Align Technology | Unicasa Indstria vs. Unifique Telecomunicaes SA | Unicasa Indstria vs. Metalurgica Gerdau SA | Unicasa Indstria vs. Zoom Video Communications |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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