Correlation Between Rumo SA and Panatlntica
Can any of the company-specific risk be diversified away by investing in both Rumo SA and Panatlntica 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 Rumo SA and Panatlntica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rumo SA and Panatlntica SA, you can compare the effects of market volatilities on Rumo SA and Panatlntica 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 Rumo SA with a short position of Panatlntica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rumo SA and Panatlntica.
Diversification Opportunities for Rumo SA and Panatlntica
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rumo and Panatlntica is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rumo SA and Panatlntica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panatlntica SA and Rumo SA 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 Rumo SA are associated (or correlated) with Panatlntica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panatlntica SA has no effect on the direction of Rumo SA i.e., Rumo SA and Panatlntica go up and down completely randomly.
Pair Corralation between Rumo SA and Panatlntica
Assuming the 90 days trading horizon Rumo SA is expected to under-perform the Panatlntica. But the stock apears to be less risky and, when comparing its historical volatility, Rumo SA is 4.05 times less risky than Panatlntica. The stock trades about -0.03 of its potential returns per unit of risk. The Panatlntica SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,565 in Panatlntica SA on September 4, 2024 and sell it today you would earn a total of 140.00 from holding Panatlntica SA or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 62.5% |
| Values | Daily Returns |
Rumo SA vs. Panatlntica SA
Performance |
| Timeline |
| Rumo SA |
| Panatlntica SA |
Rumo SA and Panatlntica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rumo SA and Panatlntica
The main advantage of trading using opposite Rumo SA and Panatlntica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rumo SA position performs unexpectedly, Panatlntica 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 Panatlntica will offset losses from the drop in Panatlntica's long position.| Rumo SA vs. Oi SA | Rumo SA vs. Metalurgica Gerdau SA | Rumo SA vs. Metalurgica Gerdau SA | Rumo SA vs. Oi SA |
| Panatlntica vs. Multilaser Industrial SA | Panatlntica vs. Cognizant Technology Solutions | Panatlntica vs. Livetech da Bahia | Panatlntica vs. G2D Investments |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |