Correlation Between Recrusul and JSL SA
Can any of the company-specific risk be diversified away by investing in both Recrusul and JSL 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 Recrusul and JSL SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recrusul SA and JSL SA, you can compare the effects of market volatilities on Recrusul and JSL 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 Recrusul with a short position of JSL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recrusul and JSL SA.
Diversification Opportunities for Recrusul and JSL SA
Excellent diversification
The 3 months correlation between Recrusul and JSL is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Recrusul SA and JSL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSL SA and Recrusul 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 Recrusul SA are associated (or correlated) with JSL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSL SA has no effect on the direction of Recrusul i.e., Recrusul and JSL SA go up and down completely randomly.
Pair Corralation between Recrusul and JSL SA
Assuming the 90 days trading horizon Recrusul SA is expected to generate 1.65 times more return on investment than JSL SA. However, Recrusul is 1.65 times more volatile than JSL SA. It trades about -0.06 of its potential returns per unit of risk. JSL SA is currently generating about -0.13 per unit of risk. If you would invest 195.00 in Recrusul SA on August 30, 2024 and sell it today you would lose (30.00) from holding Recrusul SA or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Recrusul SA vs. JSL SA
Performance |
| Timeline |
| Recrusul SA |
| JSL SA |
Recrusul and JSL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Recrusul and JSL SA
The main advantage of trading using opposite Recrusul and JSL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recrusul position performs unexpectedly, JSL 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 JSL SA will offset losses from the drop in JSL SA's long position.| Recrusul vs. Recrusul SA | Recrusul vs. Lupatech SA | Recrusul vs. Viver Incorporadora e | Recrusul vs. Triunfo Participaes e |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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