Correlation Between Lojas Renner and Cyrela Brazil
Can any of the company-specific risk be diversified away by investing in both Lojas Renner and Cyrela Brazil 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 Renner and Cyrela Brazil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lojas Renner SA and Cyrela Brazil Realty, you can compare the effects of market volatilities on Lojas Renner and Cyrela Brazil 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 Renner with a short position of Cyrela Brazil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lojas Renner and Cyrela Brazil.
Diversification Opportunities for Lojas Renner and Cyrela Brazil
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lojas and Cyrela is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lojas Renner SA and Cyrela Brazil Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyrela Brazil Realty and Lojas Renner 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 Renner SA are associated (or correlated) with Cyrela Brazil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyrela Brazil Realty has no effect on the direction of Lojas Renner i.e., Lojas Renner and Cyrela Brazil go up and down completely randomly.
Pair Corralation between Lojas Renner and Cyrela Brazil
Assuming the 90 days trading horizon Lojas Renner SA is expected to under-perform the Cyrela Brazil. In addition to that, Lojas Renner is 1.32 times more volatile than Cyrela Brazil Realty. It trades about -0.27 of its total potential returns per unit of risk. Cyrela Brazil Realty is currently generating about -0.01 per unit of volatility. If you would invest 2,121 in Cyrela Brazil Realty on August 28, 2024 and sell it today you would lose (12.00) from holding Cyrela Brazil Realty or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lojas Renner SA vs. Cyrela Brazil Realty
Performance |
| Timeline |
| Lojas Renner SA |
| Cyrela Brazil Realty |
Lojas Renner and Cyrela Brazil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lojas Renner and Cyrela Brazil
The main advantage of trading using opposite Lojas Renner and Cyrela Brazil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lojas Renner position performs unexpectedly, Cyrela Brazil 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 Cyrela Brazil will offset losses from the drop in Cyrela Brazil's long position.| Lojas Renner vs. Baidu Inc | Lojas Renner vs. Deutsche Bank Aktiengesellschaft | Lojas Renner vs. HSBC Holdings plc | Lojas Renner vs. The Bank of |
| Cyrela Brazil vs. Baidu Inc | Cyrela Brazil vs. Deutsche Bank Aktiengesellschaft | Cyrela Brazil vs. HSBC Holdings plc | Cyrela Brazil vs. The Bank of |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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