Correlation Between Indstrias Romi and JHSF Participaes
Can any of the company-specific risk be diversified away by investing in both Indstrias Romi and JHSF Participaes 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 Indstrias Romi and JHSF Participaes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indstrias Romi SA and JHSF Participaes SA, you can compare the effects of market volatilities on Indstrias Romi and JHSF Participaes 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 Indstrias Romi with a short position of JHSF Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indstrias Romi and JHSF Participaes.
Diversification Opportunities for Indstrias Romi and JHSF Participaes
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indstrias and JHSF is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Indstrias Romi SA and JHSF Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JHSF Participaes and Indstrias Romi 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 Indstrias Romi SA are associated (or correlated) with JHSF Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JHSF Participaes has no effect on the direction of Indstrias Romi i.e., Indstrias Romi and JHSF Participaes go up and down completely randomly.
Pair Corralation between Indstrias Romi and JHSF Participaes
Assuming the 90 days trading horizon Indstrias Romi SA is expected to under-perform the JHSF Participaes. But the stock apears to be less risky and, when comparing its historical volatility, Indstrias Romi SA is 1.37 times less risky than JHSF Participaes. The stock trades about -0.04 of its potential returns per unit of risk. The JHSF Participaes SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 431.00 in JHSF Participaes SA on September 4, 2024 and sell it today you would earn a total of 1.00 from holding JHSF Participaes SA or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Indstrias Romi SA vs. JHSF Participaes SA
Performance |
| Timeline |
| Indstrias Romi SA |
| JHSF Participaes |
Indstrias Romi and JHSF Participaes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indstrias Romi and JHSF Participaes
The main advantage of trading using opposite Indstrias Romi and JHSF Participaes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indstrias Romi position performs unexpectedly, JHSF Participaes 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 JHSF Participaes will offset losses from the drop in JHSF Participaes' long position.| Indstrias Romi vs. SLC Agrcola SA | Indstrias Romi vs. Camil Alimentos SA | Indstrias Romi vs. Marcopolo SA | Indstrias Romi vs. Movida Participaes SA |
| JHSF Participaes vs. Tecnisa SA | JHSF Participaes vs. Cogna Educao SA | JHSF Participaes vs. Cyrela Brazil Realty | JHSF Participaes vs. Helbor Empreendimentos 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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