Correlation Between NYSE Composite and Ultrapar Participacoes
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Ultrapar Participacoes 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 NYSE Composite and Ultrapar Participacoes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ultrapar Participacoes SA, you can compare the effects of market volatilities on NYSE Composite and Ultrapar Participacoes 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 NYSE Composite with a short position of Ultrapar Participacoes. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ultrapar Participacoes.
Diversification Opportunities for NYSE Composite and Ultrapar Participacoes
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Ultrapar is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Ultrapar Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapar Participacoes and NYSE Composite 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 NYSE Composite are associated (or correlated) with Ultrapar Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapar Participacoes has no effect on the direction of NYSE Composite i.e., NYSE Composite and Ultrapar Participacoes go up and down completely randomly.
Pair Corralation between NYSE Composite and Ultrapar Participacoes
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than Ultrapar Participacoes. However, NYSE Composite is 3.99 times less risky than Ultrapar Participacoes. It trades about 0.17 of its potential returns per unit of risk. Ultrapar Participacoes SA is currently generating about -0.17 per unit of risk. If you would invest 1,901,742 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 119,240 from holding NYSE Composite or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Ultrapar Participacoes SA
Performance |
| Timeline |
NYSE Composite and Ultrapar Participacoes Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ultrapar Participacoes SA
Pair trading matchups for Ultrapar Participacoes
Pair Trading with NYSE Composite and Ultrapar Participacoes
The main advantage of trading using opposite NYSE Composite and Ultrapar Participacoes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Ultrapar Participacoes 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 Ultrapar Participacoes will offset losses from the drop in Ultrapar Participacoes' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Ultrapar Participacoes vs. Star Gas Partners | Ultrapar Participacoes vs. Par Pacific Holdings | Ultrapar Participacoes vs. Delek Energy | Ultrapar Participacoes vs. Crossamerica Partners LP |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |