Correlation Between LPS Brasil and Cambuci SA
Can any of the company-specific risk be diversified away by investing in both LPS Brasil and Cambuci 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 LPS Brasil and Cambuci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPS Brasil and Cambuci SA, you can compare the effects of market volatilities on LPS Brasil and Cambuci 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 LPS Brasil with a short position of Cambuci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPS Brasil and Cambuci SA.
Diversification Opportunities for LPS Brasil and Cambuci SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LPS and Cambuci is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LPS Brasil and Cambuci SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambuci SA and LPS Brasil 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 LPS Brasil are associated (or correlated) with Cambuci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambuci SA has no effect on the direction of LPS Brasil i.e., LPS Brasil and Cambuci SA go up and down completely randomly.
Pair Corralation between LPS Brasil and Cambuci SA
Assuming the 90 days trading horizon LPS Brasil is expected to generate 1.15 times more return on investment than Cambuci SA. However, LPS Brasil is 1.15 times more volatile than Cambuci SA. It trades about -0.04 of its potential returns per unit of risk. Cambuci SA is currently generating about -0.19 per unit of risk. If you would invest 130.00 in LPS Brasil on November 29, 2024 and sell it today you would lose (3.00) from holding LPS Brasil or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LPS Brasil vs. Cambuci SA
Performance |
| Timeline |
| LPS Brasil |
| Cambuci SA |
LPS Brasil and Cambuci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPS Brasil and Cambuci SA
The main advantage of trading using opposite LPS Brasil and Cambuci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPS Brasil position performs unexpectedly, Cambuci 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 Cambuci SA will offset losses from the drop in Cambuci SA's long position.| LPS Brasil vs. Tecnisa SA | LPS Brasil vs. Marcopolo SA | LPS Brasil vs. T4F Entretenimento SA | LPS Brasil vs. Centro de Imagem |
| Cambuci SA vs. Priner Servios Industriais | Cambuci SA vs. Cury Construtora e | Cambuci SA vs. Ambipar Participaes e | Cambuci SA vs. LPS Brasil |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |