Correlation Between LPS Brasil and Camil Alimentos
Can any of the company-specific risk be diversified away by investing in both LPS Brasil and Camil Alimentos 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 Camil Alimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPS Brasil and Camil Alimentos SA, you can compare the effects of market volatilities on LPS Brasil and Camil Alimentos 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 Camil Alimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPS Brasil and Camil Alimentos.
Diversification Opportunities for LPS Brasil and Camil Alimentos
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LPS and Camil is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding LPS Brasil and Camil Alimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camil Alimentos 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 Camil Alimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camil Alimentos SA has no effect on the direction of LPS Brasil i.e., LPS Brasil and Camil Alimentos go up and down completely randomly.
Pair Corralation between LPS Brasil and Camil Alimentos
Assuming the 90 days trading horizon LPS Brasil is expected to generate 1.6 times more return on investment than Camil Alimentos. However, LPS Brasil is 1.6 times more volatile than Camil Alimentos SA. It trades about 0.14 of its potential returns per unit of risk. Camil Alimentos SA is currently generating about -0.1 per unit of risk. If you would invest 165.00 in LPS Brasil on August 28, 2024 and sell it today you would earn a total of 11.00 from holding LPS Brasil or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPS Brasil vs. Camil Alimentos SA
Performance |
| Timeline |
| LPS Brasil |
| Camil Alimentos SA |
LPS Brasil and Camil Alimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPS Brasil and Camil Alimentos
The main advantage of trading using opposite LPS Brasil and Camil Alimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPS Brasil position performs unexpectedly, Camil Alimentos 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 Camil Alimentos will offset losses from the drop in Camil Alimentos' long position.| LPS Brasil vs. Fundo de Investimento | LPS Brasil vs. Fator IFIX Fundo | LPS Brasil vs. Domo Fundo de | LPS Brasil vs. Credit Acceptance |
| Camil Alimentos vs. Minerva SA | Camil Alimentos vs. Companhia Siderrgica Nacional | Camil Alimentos vs. Cyrela Brazil Realty |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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