Correlation Between JHSF Participaes and Cogna Educao
Can any of the company-specific risk be diversified away by investing in both JHSF Participaes and Cogna Educao 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 JHSF Participaes and Cogna Educao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JHSF Participaes SA and Cogna Educao SA, you can compare the effects of market volatilities on JHSF Participaes and Cogna Educao 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 JHSF Participaes with a short position of Cogna Educao. Check out your portfolio center. Please also check ongoing floating volatility patterns of JHSF Participaes and Cogna Educao.
Diversification Opportunities for JHSF Participaes and Cogna Educao
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JHSF and Cogna is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding JHSF Participaes SA and Cogna Educao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogna Educao SA and JHSF Participaes 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 JHSF Participaes SA are associated (or correlated) with Cogna Educao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogna Educao SA has no effect on the direction of JHSF Participaes i.e., JHSF Participaes and Cogna Educao go up and down completely randomly.
Pair Corralation between JHSF Participaes and Cogna Educao
Assuming the 90 days trading horizon JHSF Participaes SA is expected to generate 0.54 times more return on investment than Cogna Educao. However, JHSF Participaes SA is 1.86 times less risky than Cogna Educao. It trades about 0.01 of its potential returns per unit of risk. Cogna Educao SA is currently generating about 0.0 per unit of risk. If you would invest 435.00 in JHSF Participaes SA on September 3, 2024 and sell it today you would lose (3.00) from holding JHSF Participaes SA or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JHSF Participaes SA vs. Cogna Educao SA
Performance |
| Timeline |
| JHSF Participaes |
| Cogna Educao SA |
JHSF Participaes and Cogna Educao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JHSF Participaes and Cogna Educao
The main advantage of trading using opposite JHSF Participaes and Cogna Educao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JHSF Participaes position performs unexpectedly, Cogna Educao 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 Cogna Educao will offset losses from the drop in Cogna Educao's long position.| JHSF Participaes vs. Tecnisa SA | JHSF Participaes vs. Cogna Educao SA | JHSF Participaes vs. Cyrela Brazil Realty | JHSF Participaes vs. Helbor Empreendimentos SA |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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