Correlation Between Multilaser Industrial and Lupatech
Can any of the company-specific risk be diversified away by investing in both Multilaser Industrial and Lupatech 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 Multilaser Industrial and Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multilaser Industrial SA and Lupatech SA, you can compare the effects of market volatilities on Multilaser Industrial and Lupatech 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 Multilaser Industrial with a short position of Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multilaser Industrial and Lupatech.
Diversification Opportunities for Multilaser Industrial and Lupatech
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multilaser and Lupatech is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Multilaser Industrial SA and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and Multilaser Industrial 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 Multilaser Industrial SA are associated (or correlated) with Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Multilaser Industrial i.e., Multilaser Industrial and Lupatech go up and down completely randomly.
Pair Corralation between Multilaser Industrial and Lupatech
Assuming the 90 days trading horizon Multilaser Industrial SA is expected to under-perform the Lupatech. In addition to that, Multilaser Industrial is 1.29 times more volatile than Lupatech SA. It trades about -0.3 of its total potential returns per unit of risk. Lupatech SA is currently generating about -0.14 per unit of volatility. If you would invest 145.00 in Lupatech SA on August 31, 2024 and sell it today you would lose (14.00) from holding Lupatech SA or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multilaser Industrial SA vs. Lupatech SA
Performance |
| Timeline |
| Multilaser Industrial |
| Lupatech SA |
Multilaser Industrial and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multilaser Industrial and Lupatech
The main advantage of trading using opposite Multilaser Industrial and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multilaser Industrial position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Multilaser Industrial vs. Pet Center Comrcio | Multilaser Industrial vs. Locaweb Servios de | Multilaser Industrial vs. Mliuz SA | Multilaser Industrial vs. Fras le SA |
| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Eternit 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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