Correlation Between SPORT LISBOA and Transportadora
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA and Transportadora 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 SPORT LISBOA and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and Transportadora de Gas, you can compare the effects of market volatilities on SPORT LISBOA and Transportadora 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 SPORT LISBOA with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and Transportadora.
Diversification Opportunities for SPORT LISBOA and Transportadora
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPORT and Transportadora is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and SPORT LISBOA 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 SPORT LISBOA E are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of SPORT LISBOA i.e., SPORT LISBOA and Transportadora go up and down completely randomly.
Pair Corralation between SPORT LISBOA and Transportadora
Assuming the 90 days horizon SPORT LISBOA E is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, SPORT LISBOA E is 1.72 times less risky than Transportadora. The stock trades about 0.0 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,160 in Transportadora de Gas on August 31, 2024 and sell it today you would earn a total of 1,700 from holding Transportadora de Gas or generate 146.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
SPORT LISBOA E vs. Transportadora de Gas
Performance |
| Timeline |
| SPORT LISBOA E |
| Transportadora de Gas |
SPORT LISBOA and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and Transportadora
The main advantage of trading using opposite SPORT LISBOA and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| SPORT LISBOA vs. Netflix | SPORT LISBOA vs. Warner Music Group | SPORT LISBOA vs. Superior Plus Corp | SPORT LISBOA vs. NMI Holdings |
| Transportadora vs. Gladstone Investment | Transportadora vs. Games Workshop Group | Transportadora vs. MGIC INVESTMENT | Transportadora vs. HK Electric Investments |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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