Correlation Between Jefferies Financial and Recrusul
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Recrusul 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 Jefferies Financial and Recrusul into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Recrusul SA, you can compare the effects of market volatilities on Jefferies Financial and Recrusul 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 Jefferies Financial with a short position of Recrusul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Recrusul.
Diversification Opportunities for Jefferies Financial and Recrusul
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jefferies and Recrusul is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Recrusul SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recrusul SA and Jefferies Financial 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 Jefferies Financial Group are associated (or correlated) with Recrusul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recrusul SA has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Recrusul go up and down completely randomly.
Pair Corralation between Jefferies Financial and Recrusul
Assuming the 90 days trading horizon Jefferies Financial Group is expected to generate 0.55 times more return on investment than Recrusul. However, Jefferies Financial Group is 1.83 times less risky than Recrusul. It trades about 0.13 of its potential returns per unit of risk. Recrusul SA is currently generating about -0.08 per unit of risk. If you would invest 18,867 in Jefferies Financial Group on November 21, 2024 and sell it today you would earn a total of 22,174 from holding Jefferies Financial Group or generate 117.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Jefferies Financial Group vs. Recrusul SA
Performance |
Timeline |
Jefferies Financial |
Recrusul SA |
Jefferies Financial and Recrusul Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jefferies Financial and Recrusul
The main advantage of trading using opposite Jefferies Financial and Recrusul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Recrusul 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 Recrusul will offset losses from the drop in Recrusul's long position.Jefferies Financial vs. MAHLE Metal Leve | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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