Correlation Between HEDGE Brasil and Manufatura
Can any of the company-specific risk be diversified away by investing in both HEDGE Brasil and Manufatura 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 Manufatura 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 Manufatura de Brinquedos, you can compare the effects of market volatilities on HEDGE Brasil and Manufatura 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 Manufatura. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEDGE Brasil and Manufatura.
Diversification Opportunities for HEDGE Brasil and Manufatura
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEDGE and Manufatura is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding HEDGE Brasil Shopping and Manufatura de Brinquedos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manufatura de Brinquedos 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 Manufatura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manufatura de Brinquedos has no effect on the direction of HEDGE Brasil i.e., HEDGE Brasil and Manufatura go up and down completely randomly.
Pair Corralation between HEDGE Brasil and Manufatura
Assuming the 90 days trading horizon HEDGE Brasil is expected to generate 62.02 times less return on investment than Manufatura. But when comparing it to its historical volatility, HEDGE Brasil Shopping is 62.31 times less risky than Manufatura. It trades about 0.04 of its potential returns per unit of risk. Manufatura de Brinquedos is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Manufatura de Brinquedos on August 30, 2024 and sell it today you would lose (35.00) from holding Manufatura de Brinquedos or give up 8.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
HEDGE Brasil Shopping vs. Manufatura de Brinquedos
Performance |
| Timeline |
| HEDGE Brasil Shopping |
| Manufatura de Brinquedos |
HEDGE Brasil and Manufatura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEDGE Brasil and Manufatura
The main advantage of trading using opposite HEDGE Brasil and Manufatura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEDGE Brasil position performs unexpectedly, Manufatura 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 Manufatura will offset losses from the drop in Manufatura's long position.| HEDGE Brasil vs. HEDGE OFFICE INCOME | HEDGE Brasil vs. Real Estate Investment | HEDGE Brasil vs. NAVI CRDITO IMOBILIRIO | HEDGE Brasil vs. LIFE CAPITAL PARTNERS |
| Manufatura vs. Inepar SA Indstria | Manufatura vs. Bombril SA | Manufatura vs. Hotis Othon SA | Manufatura vs. Hrcules 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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