Correlation Between Locaweb Servios and Roku
Can any of the company-specific risk be diversified away by investing in both Locaweb Servios and Roku 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 Locaweb Servios and Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locaweb Servios de and Roku Inc, you can compare the effects of market volatilities on Locaweb Servios and Roku 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 Locaweb Servios with a short position of Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locaweb Servios and Roku.
Diversification Opportunities for Locaweb Servios and Roku
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Locaweb and Roku is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Locaweb Servios de and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and Locaweb Servios 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 Locaweb Servios de are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Locaweb Servios i.e., Locaweb Servios and Roku go up and down completely randomly.
Pair Corralation between Locaweb Servios and Roku
Assuming the 90 days trading horizon Locaweb Servios de is expected to under-perform the Roku. But the stock apears to be less risky and, when comparing its historical volatility, Locaweb Servios de is 1.17 times less risky than Roku. The stock trades about -0.02 of its potential returns per unit of risk. The Roku Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Roku Inc on September 3, 2024 and sell it today you would earn a total of 657.00 from holding Roku Inc or generate 47.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locaweb Servios de vs. Roku Inc
Performance |
| Timeline |
| Locaweb Servios de |
| Roku Inc |
Locaweb Servios and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locaweb Servios and Roku
The main advantage of trading using opposite Locaweb Servios and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locaweb Servios position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| Locaweb Servios vs. Mliuz SA | Locaweb Servios vs. TOTVS SA | Locaweb Servios vs. Pet Center Comrcio | Locaweb Servios vs. Natura Co Holding |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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