Correlation Between Basic Materials and Hypera SA
Can any of the company-specific risk be diversified away by investing in both Basic Materials and Hypera SA 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 Hypera SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Materials and Hypera SA, you can compare the effects of market volatilities on Basic Materials and Hypera SA 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 Hypera SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Materials and Hypera SA.
Diversification Opportunities for Basic Materials and Hypera SA
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basic and Hypera is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Basic Materials and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera 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 Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Basic Materials i.e., Basic Materials and Hypera SA go up and down completely randomly.
Pair Corralation between Basic Materials and Hypera SA
Assuming the 90 days trading horizon Basic Materials is expected to generate 0.45 times more return on investment than Hypera SA. However, Basic Materials is 2.2 times less risky than Hypera SA. It trades about 0.0 of its potential returns per unit of risk. Hypera SA is currently generating about -0.44 per unit of risk. If you would invest 577,604 in Basic Materials on August 31, 2024 and sell it today you would lose (484.00) from holding Basic Materials or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Materials vs. Hypera SA
Performance |
| Timeline |
Basic Materials and Hypera SA Volatility Contrast
Predicted Return Density |
| Returns |
Basic Materials
Pair trading matchups for Basic Materials
Hypera SA
Pair trading matchups for Hypera SA
Pair Trading with Basic Materials and Hypera SA
The main advantage of trading using opposite Basic Materials and Hypera SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Materials position performs unexpectedly, Hypera SA 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 Hypera SA will offset losses from the drop in Hypera SA's long position.| Basic Materials vs. Micron Technology | Basic Materials vs. Ross Stores | Basic Materials vs. Monster Beverage | Basic Materials vs. TAL Education Group |
| Hypera SA vs. Raia Drogasil SA | Hypera SA vs. Fleury SA | Hypera SA vs. Qualicorp Consultoria e | Hypera SA vs. Lojas Renner 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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