Correlation Between Iochpe Maxion and CCR SA
Can any of the company-specific risk be diversified away by investing in both Iochpe Maxion and CCR SA 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 Iochpe Maxion and CCR SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iochpe Maxion SA and CCR SA, you can compare the effects of market volatilities on Iochpe Maxion and CCR SA 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 Iochpe Maxion with a short position of CCR SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iochpe Maxion and CCR SA.
Diversification Opportunities for Iochpe Maxion and CCR SA
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Iochpe and CCR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Iochpe Maxion SA and CCR SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCR SA and Iochpe Maxion 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 Iochpe Maxion SA are associated (or correlated) with CCR SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCR SA has no effect on the direction of Iochpe Maxion i.e., Iochpe Maxion and CCR SA go up and down completely randomly.
Pair Corralation between Iochpe Maxion and CCR SA
Assuming the 90 days trading horizon Iochpe Maxion SA is expected to generate 1.59 times more return on investment than CCR SA. However, Iochpe Maxion is 1.59 times more volatile than CCR SA. It trades about 0.03 of its potential returns per unit of risk. CCR SA is currently generating about -0.11 per unit of risk. If you would invest 1,140 in Iochpe Maxion SA on August 28, 2024 and sell it today you would earn a total of 37.00 from holding Iochpe Maxion SA or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iochpe Maxion SA vs. CCR SA
Performance |
| Timeline |
| Iochpe Maxion SA |
| CCR SA |
Iochpe Maxion and CCR SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iochpe Maxion and CCR SA
The main advantage of trading using opposite Iochpe Maxion and CCR SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iochpe Maxion position performs unexpectedly, CCR SA 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 CCR SA will offset losses from the drop in CCR SA's long position.| Iochpe Maxion vs. METISA Metalrgica Timboense | Iochpe Maxion vs. Lupatech SA | Iochpe Maxion vs. Recrusul SA | Iochpe Maxion vs. Fras le SA |
| CCR SA vs. EcoRodovias Infraestrutura e | CCR SA vs. Companhia de Saneamento | CCR SA vs. Companhia Energtica de | CCR SA vs. Cosan 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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