Correlation Between Recrusul and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both Recrusul and Mangels Industrial 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 Mangels Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recrusul SA and Mangels Industrial SA, you can compare the effects of market volatilities on Recrusul and Mangels Industrial 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 Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recrusul and Mangels Industrial.
Diversification Opportunities for Recrusul and Mangels Industrial
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Recrusul and Mangels is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Recrusul SA and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial 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 Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Recrusul i.e., Recrusul and Mangels Industrial go up and down completely randomly.
Pair Corralation between Recrusul and Mangels Industrial
Assuming the 90 days trading horizon Recrusul SA is expected to generate 1.71 times more return on investment than Mangels Industrial. However, Recrusul is 1.71 times more volatile than Mangels Industrial SA. It trades about -0.04 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about -0.09 per unit of risk. If you would invest 364.00 in Recrusul SA on September 4, 2024 and sell it today you would lose (220.00) from holding Recrusul SA or give up 60.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Recrusul SA vs. Mangels Industrial SA
Performance |
| Timeline |
| Recrusul SA |
| Mangels Industrial |
Recrusul and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Recrusul and Mangels Industrial
The main advantage of trading using opposite Recrusul and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recrusul position performs unexpectedly, Mangels Industrial 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 Mangels Industrial will offset losses from the drop in Mangels Industrial's long position.| Recrusul vs. Recrusul SA | Recrusul vs. Lupatech SA | Recrusul vs. Viver Incorporadora e | Recrusul vs. Triunfo Participaes e |
| Mangels Industrial vs. Inepar SA Indstria | Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Paranapanema SA | Mangels Industrial vs. Plascar Participaes Industriais |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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