Correlation Between Lupatech and Manufatura
Can any of the company-specific risk be diversified away by investing in both Lupatech and Manufatura 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 Lupatech and Manufatura into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Manufatura de Brinquedos, you can compare the effects of market volatilities on Lupatech and Manufatura 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 Lupatech with a short position of Manufatura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Manufatura.
Diversification Opportunities for Lupatech and Manufatura
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lupatech and Manufatura is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Manufatura de Brinquedos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manufatura de Brinquedos and Lupatech 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 Lupatech SA are associated (or correlated) with Manufatura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manufatura de Brinquedos has no effect on the direction of Lupatech i.e., Lupatech and Manufatura go up and down completely randomly.
Pair Corralation between Lupatech and Manufatura
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Manufatura. In addition to that, Lupatech is 1.01 times more volatile than Manufatura de Brinquedos. It trades about -0.13 of its total potential returns per unit of risk. Manufatura de Brinquedos is currently generating about -0.01 per unit of volatility. If you would invest 370.00 in Manufatura de Brinquedos on September 1, 2024 and sell it today you would lose (5.00) from holding Manufatura de Brinquedos or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lupatech SA vs. Manufatura de Brinquedos
Performance |
| Timeline |
| Lupatech SA |
| Manufatura de Brinquedos |
Lupatech and Manufatura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Manufatura
The main advantage of trading using opposite Lupatech and Manufatura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech position performs unexpectedly, Manufatura 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 Manufatura will offset losses from the drop in Manufatura's long position.| Lupatech vs. Sumitomo Mitsui Financial | Lupatech vs. Banco Santander Chile | Lupatech vs. Toyota Motor | Lupatech vs. Mitsubishi UFJ Financial |
| Manufatura vs. Inepar SA Indstria | Manufatura vs. Lupatech SA | Manufatura vs. Rossi Residencial SA | Manufatura vs. Fras le 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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