Correlation Between Basic Materials and Camil Alimentos
Can any of the company-specific risk be diversified away by investing in both Basic Materials and Camil Alimentos 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 Basic Materials and Camil Alimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials and Camil Alimentos SA, you can compare the effects of market volatilities on Basic Materials and Camil Alimentos 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 Basic Materials with a short position of Camil Alimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Camil Alimentos.
Diversification Opportunities for Basic Materials and Camil Alimentos
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Basic and Camil is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and Camil Alimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camil Alimentos SA and Basic Materials 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 Basic Materials are associated (or correlated) with Camil Alimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camil Alimentos SA has no effect on the direction of Basic Materials i.e., Basic Materials and Camil Alimentos go up and down completely randomly.
Pair Corralation between Basic Materials and Camil Alimentos
Assuming the 90 days trading horizon Basic Materials is expected to generate 0.66 times more return on investment than Camil Alimentos. However, Basic Materials is 1.51 times less risky than Camil Alimentos. It trades about 0.03 of its potential returns per unit of risk. Camil Alimentos SA is currently generating about -0.16 per unit of risk. If you would invest 559,992 in Basic Materials on August 29, 2024 and sell it today you would earn a total of 12,627 from holding Basic Materials or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Basic Materials vs. Camil Alimentos SA
Performance |
| Timeline |
Basic Materials and Camil Alimentos Volatility Contrast
Predicted Return Density |
| Returns |
Basic Materials
Pair trading matchups for Basic Materials
Camil Alimentos SA
Pair trading matchups for Camil Alimentos
Pair Trading with Basic Materials and Camil Alimentos
The main advantage of trading using opposite Basic Materials and Camil Alimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, Camil Alimentos 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 Camil Alimentos will offset losses from the drop in Camil Alimentos' long position.| Basic Materials vs. CM Hospitalar SA | Basic Materials vs. Metalurgica Gerdau SA | Basic Materials vs. Broadcom | Basic Materials vs. Multilaser Industrial SA |
| Camil Alimentos vs. SLC Agrcola SA | Camil Alimentos vs. Movida Participaes SA | Camil Alimentos vs. Indstrias Romi SA | Camil Alimentos vs. M Dias Branco |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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