Correlation Between Lojas Quero and ATMA Participaes
Can any of the company-specific risk be diversified away by investing in both Lojas Quero and ATMA Participaes 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 Lojas Quero and ATMA Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lojas Quero Quero SA and ATMA Participaes SA, you can compare the effects of market volatilities on Lojas Quero and ATMA Participaes 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 Lojas Quero with a short position of ATMA Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lojas Quero and ATMA Participaes.
Diversification Opportunities for Lojas Quero and ATMA Participaes
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lojas and ATMA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lojas Quero Quero SA and ATMA Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATMA Participaes and Lojas Quero 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 Lojas Quero Quero SA are associated (or correlated) with ATMA Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATMA Participaes has no effect on the direction of Lojas Quero i.e., Lojas Quero and ATMA Participaes go up and down completely randomly.
Pair Corralation between Lojas Quero and ATMA Participaes
Assuming the 90 days trading horizon Lojas Quero Quero SA is expected to under-perform the ATMA Participaes. But the stock apears to be less risky and, when comparing its historical volatility, Lojas Quero Quero SA is 1.93 times less risky than ATMA Participaes. The stock trades about -0.18 of its potential returns per unit of risk. The ATMA Participaes SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 112.00 in ATMA Participaes SA on October 20, 2024 and sell it today you would earn a total of 2.00 from holding ATMA Participaes SA or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lojas Quero Quero SA vs. ATMA Participaes SA
Performance |
| Timeline |
| Lojas Quero Quero |
| ATMA Participaes |
Lojas Quero and ATMA Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lojas Quero and ATMA Participaes
The main advantage of trading using opposite Lojas Quero and ATMA Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lojas Quero position performs unexpectedly, ATMA Participaes 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 ATMA Participaes will offset losses from the drop in ATMA Participaes' long position.| Lojas Quero vs. Pet Center Comrcio | Lojas Quero vs. Mitre Realty Empreendimentos | Lojas Quero vs. Mliuz SA | Lojas Quero vs. Direcional Engenharia SA |
| ATMA Participaes vs. Mliuz SA | ATMA Participaes vs. Lojas Quero Quero SA | ATMA Participaes vs. GPS Participaes e | ATMA Participaes vs. Grupo SBF 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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