Correlation Between Robot SA and Vale SA
Can any of the company-specific risk be diversified away by investing in both Robot SA and Vale SA 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 Robot SA and Vale SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robot SA and Vale SA, you can compare the effects of market volatilities on Robot SA and Vale SA 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 Robot SA with a short position of Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robot SA and Vale SA.
Diversification Opportunities for Robot SA and Vale SA
Excellent diversification
The 3 months correlation between Robot and Vale is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Robot SA and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA and Robot 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 Robot SA are associated (or correlated) with Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of Robot SA i.e., Robot SA and Vale SA go up and down completely randomly.
Pair Corralation between Robot SA and Vale SA
Assuming the 90 days trading horizon Robot SA is expected to generate 1.12 times more return on investment than Vale SA. However, Robot SA is 1.12 times more volatile than Vale SA. It trades about 0.35 of its potential returns per unit of risk. Vale SA is currently generating about -0.12 per unit of risk. If you would invest 153.00 in Robot SA on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Robot SA or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Robot SA vs. Vale SA
Performance |
| Timeline |
| Robot SA |
| Vale SA |
Robot SA and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robot SA and Vale SA
The main advantage of trading using opposite Robot SA and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robot SA position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.| Robot SA vs. Metrovacesa SA | Robot SA vs. Elecnor SA | Robot SA vs. Mapfre | Robot SA vs. Tander Inversiones SOCIMI |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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