Correlation Between Guararapes Confeces and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both Guararapes Confeces and ATMA Participaes 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 Guararapes Confeces and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guararapes Confeces SA and ATMA Participaes SA, you can compare the effects of market volatilities on Guararapes Confeces and ATMA Participaes 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 Guararapes Confeces with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guararapes Confeces and ATMA Participaes.
Diversification Opportunities for Guararapes Confeces and ATMA Participaes
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guararapes and ATMA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Guararapes Confeces SA and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and Guararapes Confeces 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 Guararapes Confeces SA are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of Guararapes Confeces i.e., Guararapes Confeces and ATMA Participaes go up and down completely randomly.
Pair Corralation between Guararapes Confeces and ATMA Participaes
Assuming the 90 days trading horizon Guararapes Confeces SA is expected to under-perform the ATMA Participaes. In addition to that, Guararapes Confeces is 3.04 times more volatile than ATMA Participaes SA. It trades about -0.06 of its total potential returns per unit of risk. ATMA Participaes SA is currently generating about -0.03 per unit of volatility. If you would invest 112.00 in ATMA Participaes SA on November 29, 2024 and sell it today you would lose (1.00) from holding ATMA Participaes SA or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guararapes Confeces SA vs. ATMA Participaes SA
Performance |
| Timeline |
| Guararapes Confeces |
| ATMA Participaes |
Guararapes Confeces and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guararapes Confeces and ATMA Participaes
The main advantage of trading using opposite Guararapes Confeces and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guararapes Confeces position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.| Guararapes Confeces vs. Lojas Renner SA | Guararapes Confeces vs. Marisa Lojas SA | Guararapes Confeces vs. Vulcabras Azaleia SA | Guararapes Confeces vs. Alpargatas SA |
| ATMA Participaes vs. Triunfo Participaes e | ATMA Participaes vs. Allpark Empreendimentos Participaes | ATMA Participaes vs. Azevedo Travassos SA | ATMA Participaes vs. Azevedo Travassos 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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