Correlation Between Localiza Rent and Lojas Renner
Can any of the company-specific risk be diversified away by investing in both Localiza Rent and Lojas Renner 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 Localiza Rent and Lojas Renner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Localiza Rent a and Lojas Renner SA, you can compare the effects of market volatilities on Localiza Rent and Lojas Renner 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 Localiza Rent with a short position of Lojas Renner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Localiza Rent and Lojas Renner.
Diversification Opportunities for Localiza Rent and Lojas Renner
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Localiza and Lojas is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Localiza Rent a and Lojas Renner SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Renner SA and Localiza Rent 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 Localiza Rent a are associated (or correlated) with Lojas Renner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Renner SA has no effect on the direction of Localiza Rent i.e., Localiza Rent and Lojas Renner go up and down completely randomly.
Pair Corralation between Localiza Rent and Lojas Renner
Assuming the 90 days trading horizon Localiza Rent a is expected to generate 1.03 times more return on investment than Lojas Renner. However, Localiza Rent is 1.03 times more volatile than Lojas Renner SA. It trades about 0.09 of its potential returns per unit of risk. Lojas Renner SA is currently generating about -0.25 per unit of risk. If you would invest 4,237 in Localiza Rent a on August 24, 2024 and sell it today you would earn a total of 183.00 from holding Localiza Rent a or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Localiza Rent a vs. Lojas Renner SA
Performance |
| Timeline |
| Localiza Rent a |
| Lojas Renner SA |
Localiza Rent and Lojas Renner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Localiza Rent and Lojas Renner
The main advantage of trading using opposite Localiza Rent and Lojas Renner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Localiza Rent position performs unexpectedly, Lojas Renner 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 Lojas Renner will offset losses from the drop in Lojas Renner's long position.| Localiza Rent vs. METISA Metalrgica Timboense | Localiza Rent vs. Lupatech SA | Localiza Rent vs. Recrusul SA | Localiza Rent vs. Fras le SA |
| Lojas Renner vs. WEG SA | Lojas Renner vs. Localiza Rent a | Lojas Renner vs. Raia Drogasil SA | Lojas Renner vs. Ambev SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |