Correlation Between General Shopping and So Carlos
Can any of the company-specific risk be diversified away by investing in both General Shopping and So Carlos 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 So Carlos 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 So Carlos Empreendimentos, you can compare the effects of market volatilities on General Shopping and So Carlos 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 So Carlos. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Shopping and So Carlos.
Diversification Opportunities for General Shopping and So Carlos
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between General and SCAR3 is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding General Shopping e and So Carlos Empreendimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Carlos Empreendimentos 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 So Carlos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Carlos Empreendimentos has no effect on the direction of General Shopping i.e., General Shopping and So Carlos go up and down completely randomly.
Pair Corralation between General Shopping and So Carlos
Assuming the 90 days trading horizon General Shopping e is expected to under-perform the So Carlos. In addition to that, General Shopping is 2.15 times more volatile than So Carlos Empreendimentos. It trades about -0.38 of its total potential returns per unit of risk. So Carlos Empreendimentos is currently generating about -0.31 per unit of volatility. If you would invest 2,260 in So Carlos Empreendimentos on September 1, 2024 and sell it today you would lose (201.00) from holding So Carlos Empreendimentos or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Shopping e vs. So Carlos Empreendimentos
Performance |
| Timeline |
| General Shopping e |
| So Carlos Empreendimentos |
General Shopping and So Carlos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Shopping and So Carlos
The main advantage of trading using opposite General Shopping and So Carlos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Shopping position performs unexpectedly, So Carlos 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 So Carlos will offset losses from the drop in So Carlos' long position.| General Shopping vs. Paycom Software | General Shopping vs. Tyson Foods | General Shopping vs. Global X Funds | General Shopping vs. Verizon Communications |
| So Carlos vs. EZTEC Empreendimentos e | So Carlos vs. PBG SA | So Carlos vs. LPS Brasil | So Carlos vs. Tecnisa 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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