Correlation Between Profarma Distribuidora and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Profarma Distribuidora and CM Hospitalar 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 Profarma Distribuidora and CM Hospitalar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profarma Distribuidora de and CM Hospitalar SA, you can compare the effects of market volatilities on Profarma Distribuidora and CM Hospitalar 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 Profarma Distribuidora with a short position of CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profarma Distribuidora and CM Hospitalar.
Diversification Opportunities for Profarma Distribuidora and CM Hospitalar
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Profarma and VVEO3 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Profarma Distribuidora de and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA and Profarma Distribuidora 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 Profarma Distribuidora de are associated (or correlated) with CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Profarma Distribuidora i.e., Profarma Distribuidora and CM Hospitalar go up and down completely randomly.
Pair Corralation between Profarma Distribuidora and CM Hospitalar
Assuming the 90 days trading horizon Profarma Distribuidora de is expected to generate 0.84 times more return on investment than CM Hospitalar. However, Profarma Distribuidora de is 1.19 times less risky than CM Hospitalar. It trades about 0.07 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.13 per unit of risk. If you would invest 588.00 in Profarma Distribuidora de on October 25, 2024 and sell it today you would earn a total of 21.00 from holding Profarma Distribuidora de or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profarma Distribuidora de vs. CM Hospitalar SA
Performance |
| Timeline |
| Profarma Distribuidora |
| CM Hospitalar SA |
Profarma Distribuidora and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profarma Distribuidora and CM Hospitalar
The main advantage of trading using opposite Profarma Distribuidora and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profarma Distribuidora position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Profarma Distribuidora vs. Mills Estruturas e | Profarma Distribuidora vs. Tecnisa SA | Profarma Distribuidora vs. Odontoprev SA | Profarma Distribuidora vs. Positivo Tecnologia SA |
| CM Hospitalar vs. Profarma Distribuidora de | CM Hospitalar vs. Datadog, | CM Hospitalar vs. Energisa SA | CM Hospitalar vs. BTG Pactual Logstica |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |