Correlation Between Lupatech and Minupar Participaes
Can any of the company-specific risk be diversified away by investing in both Lupatech and Minupar 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 Lupatech and Minupar Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Minupar Participaes SA, you can compare the effects of market volatilities on Lupatech and Minupar 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 Lupatech with a short position of Minupar Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Minupar Participaes.
Diversification Opportunities for Lupatech and Minupar Participaes
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lupatech and Minupar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Minupar Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minupar Participaes 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 Minupar Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minupar Participaes has no effect on the direction of Lupatech i.e., Lupatech and Minupar Participaes go up and down completely randomly.
Pair Corralation between Lupatech and Minupar Participaes
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Minupar Participaes. But the stock apears to be less risky and, when comparing its historical volatility, Lupatech SA is 1.02 times less risky than Minupar Participaes. The stock trades about -0.04 of its potential returns per unit of risk. The Minupar Participaes SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 614.00 in Minupar Participaes SA on September 2, 2024 and sell it today you would earn a total of 1,335 from holding Minupar Participaes SA or generate 217.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lupatech SA vs. Minupar Participaes SA
Performance |
| Timeline |
| Lupatech SA |
| Minupar Participaes |
Lupatech and Minupar Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Minupar Participaes
The main advantage of trading using opposite Lupatech and Minupar Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech position performs unexpectedly, Minupar 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 Minupar Participaes will offset losses from the drop in Minupar Participaes' long position.| Lupatech vs. Sumitomo Mitsui Financial | Lupatech vs. Banco Santander Chile | Lupatech vs. Toyota Motor | Lupatech vs. Mitsubishi UFJ Financial |
| Minupar Participaes vs. Lupatech SA | Minupar Participaes vs. Refinaria de Petrleos | Minupar Participaes vs. Recrusul SA | Minupar Participaes vs. Plascar Participaes Industriais |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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