Correlation Between PagSeguro Digital and Dlocal
Can any of the company-specific risk be diversified away by investing in both PagSeguro Digital and Dlocal 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 PagSeguro Digital and Dlocal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PagSeguro Digital and Dlocal, you can compare the effects of market volatilities on PagSeguro Digital and Dlocal 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 PagSeguro Digital with a short position of Dlocal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PagSeguro Digital and Dlocal.
Diversification Opportunities for PagSeguro Digital and Dlocal
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PagSeguro and Dlocal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PagSeguro Digital and Dlocal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dlocal and PagSeguro Digital 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 PagSeguro Digital are associated (or correlated) with Dlocal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dlocal has no effect on the direction of PagSeguro Digital i.e., PagSeguro Digital and Dlocal go up and down completely randomly.
Pair Corralation between PagSeguro Digital and Dlocal
Given the investment horizon of 90 days PagSeguro Digital is expected to under-perform the Dlocal. But the stock apears to be less risky and, when comparing its historical volatility, PagSeguro Digital is 1.24 times less risky than Dlocal. The stock trades about -0.08 of its potential returns per unit of risk. The Dlocal is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,611 in Dlocal on November 3, 2024 and sell it today you would lose (291.00) from holding Dlocal or give up 18.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PagSeguro Digital vs. Dlocal
Performance |
| Timeline |
| PagSeguro Digital |
| Dlocal |
PagSeguro Digital and Dlocal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PagSeguro Digital and Dlocal
The main advantage of trading using opposite PagSeguro Digital and Dlocal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PagSeguro Digital position performs unexpectedly, Dlocal 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 Dlocal will offset losses from the drop in Dlocal's long position.| PagSeguro Digital vs. Marqeta | PagSeguro Digital vs. StoneCo | PagSeguro Digital vs. Confluent | PagSeguro Digital vs. Dlocal |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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