Correlation Between PagSeguro Digital and A1KA34
Can any of the company-specific risk be diversified away by investing in both PagSeguro Digital and A1KA34 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 A1KA34 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PagSeguro Digital and A1KA34, you can compare the effects of market volatilities on PagSeguro Digital and A1KA34 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 A1KA34. Check out your portfolio center. Please also check ongoing floating volatility patterns of PagSeguro Digital and A1KA34.
Diversification Opportunities for PagSeguro Digital and A1KA34
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between PagSeguro and A1KA34 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PagSeguro Digital and A1KA34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A1KA34 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 A1KA34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A1KA34 has no effect on the direction of PagSeguro Digital i.e., PagSeguro Digital and A1KA34 go up and down completely randomly.
Pair Corralation between PagSeguro Digital and A1KA34
Assuming the 90 days trading horizon PagSeguro Digital is expected to generate 1.69 times less return on investment than A1KA34. In addition to that, PagSeguro Digital is 1.68 times more volatile than A1KA34. It trades about 0.01 of its total potential returns per unit of risk. A1KA34 is currently generating about 0.04 per unit of volatility. If you would invest 3,879 in A1KA34 on September 13, 2024 and sell it today you would earn a total of 1,011 from holding A1KA34 or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
PagSeguro Digital vs. A1KA34
Performance |
| Timeline |
| PagSeguro Digital |
| A1KA34 |
PagSeguro Digital and A1KA34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PagSeguro Digital and A1KA34
The main advantage of trading using opposite PagSeguro Digital and A1KA34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PagSeguro Digital position performs unexpectedly, A1KA34 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 A1KA34 will offset losses from the drop in A1KA34's long position.| PagSeguro Digital vs. Adobe Inc | PagSeguro Digital vs. Fortinet | PagSeguro Digital vs. Block Inc | PagSeguro Digital vs. A1KA34 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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