Correlation Between General Shopping and Natura Co
Can any of the company-specific risk be diversified away by investing in both General Shopping and Natura Co 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 General Shopping and Natura Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Shopping e and Natura Co Holding, you can compare the effects of market volatilities on General Shopping and Natura Co 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 General Shopping with a short position of Natura Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Shopping and Natura Co.
Diversification Opportunities for General Shopping and Natura Co
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Natura is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding General Shopping e and Natura Co Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natura Co Holding and General Shopping 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 General Shopping e are associated (or correlated) with Natura Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natura Co Holding has no effect on the direction of General Shopping i.e., General Shopping and Natura Co go up and down completely randomly.
Pair Corralation between General Shopping and Natura Co
Assuming the 90 days trading horizon General Shopping e is expected to under-perform the Natura Co. In addition to that, General Shopping is 1.2 times more volatile than Natura Co Holding. It trades about -0.4 of its total potential returns per unit of risk. Natura Co Holding is currently generating about 0.03 per unit of volatility. If you would invest 1,414 in Natura Co Holding on August 27, 2024 and sell it today you would earn a total of 11.00 from holding Natura Co Holding or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Shopping e vs. Natura Co Holding
Performance |
| Timeline |
| General Shopping e |
| Natura Co Holding |
General Shopping and Natura Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Shopping and Natura Co
The main advantage of trading using opposite General Shopping and Natura Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Shopping position performs unexpectedly, Natura Co 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 Natura Co will offset losses from the drop in Natura Co's long position.| General Shopping vs. Cognizant Technology Solutions | General Shopping vs. Marfrig Global Foods | General Shopping vs. Paycom Software | General Shopping vs. Extra Space Storage |
| Natura Co vs. The Procter Gamble | Natura Co vs. Unilever PLC | Natura Co vs. Colgate Palmolive | Natura Co vs. Bombril 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |