Correlation Between HEDGE Brasil and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both HEDGE Brasil and BB Seguridade 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 HEDGE Brasil and BB Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEDGE Brasil Shopping and BB Seguridade Participacoes, you can compare the effects of market volatilities on HEDGE Brasil and BB Seguridade 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 HEDGE Brasil with a short position of BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEDGE Brasil and BB Seguridade.
Diversification Opportunities for HEDGE Brasil and BB Seguridade
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HEDGE and BBSE3 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding HEDGE Brasil Shopping and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic and HEDGE Brasil 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 HEDGE Brasil Shopping are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of HEDGE Brasil i.e., HEDGE Brasil and BB Seguridade go up and down completely randomly.
Pair Corralation between HEDGE Brasil and BB Seguridade
Assuming the 90 days trading horizon HEDGE Brasil Shopping is expected to generate 0.57 times more return on investment than BB Seguridade. However, HEDGE Brasil Shopping is 1.76 times less risky than BB Seguridade. It trades about 0.06 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about -0.04 per unit of risk. If you would invest 19,719 in HEDGE Brasil Shopping on August 28, 2024 and sell it today you would earn a total of 130.00 from holding HEDGE Brasil Shopping or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEDGE Brasil Shopping vs. BB Seguridade Participacoes
Performance |
| Timeline |
| HEDGE Brasil Shopping |
| BB Seguridade Partic |
HEDGE Brasil and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEDGE Brasil and BB Seguridade
The main advantage of trading using opposite HEDGE Brasil and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEDGE Brasil position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| HEDGE Brasil vs. BTG Pactual Logstica | HEDGE Brasil vs. Plano Plano Desenvolvimento | HEDGE Brasil vs. Cable One | HEDGE Brasil vs. ATMA Participaes SA |
| BB Seguridade vs. Transmissora Aliana de | BB Seguridade vs. Banco do Brasil | BB Seguridade vs. Itasa Investimentos | BB Seguridade vs. Engie Brasil Energia |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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