Correlation Between Alfa Holdings and Cambuci SA
Can any of the company-specific risk be diversified away by investing in both Alfa Holdings and Cambuci 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 Alfa Holdings and Cambuci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Holdings SA and Cambuci SA, you can compare the effects of market volatilities on Alfa Holdings and Cambuci 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 Alfa Holdings with a short position of Cambuci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Holdings and Cambuci SA.
Diversification Opportunities for Alfa Holdings and Cambuci SA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alfa and Cambuci is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Holdings SA and Cambuci SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambuci SA and Alfa Holdings 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 Alfa Holdings SA are associated (or correlated) with Cambuci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambuci SA has no effect on the direction of Alfa Holdings i.e., Alfa Holdings and Cambuci SA go up and down completely randomly.
Pair Corralation between Alfa Holdings and Cambuci SA
Assuming the 90 days trading horizon Alfa Holdings SA is expected to under-perform the Cambuci SA. In addition to that, Alfa Holdings is 1.59 times more volatile than Cambuci SA. It trades about -0.1 of its total potential returns per unit of risk. Cambuci SA is currently generating about -0.11 per unit of volatility. If you would invest 1,218 in Cambuci SA on September 2, 2024 and sell it today you would lose (157.00) from holding Cambuci SA or give up 12.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Holdings SA vs. Cambuci SA
Performance |
| Timeline |
| Alfa Holdings SA |
| Cambuci SA |
Alfa Holdings and Cambuci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Holdings and Cambuci SA
The main advantage of trading using opposite Alfa Holdings and Cambuci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Holdings position performs unexpectedly, Cambuci 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 Cambuci SA will offset losses from the drop in Cambuci SA's long position.| Alfa Holdings vs. Alfa Holdings SA | Alfa Holdings vs. Alfa Holdings SA | Alfa Holdings vs. Banco Alfa de | Alfa Holdings vs. Banco Alfa de |
| Cambuci SA vs. Priner Servios Industriais | Cambuci SA vs. Cury Construtora e | Cambuci SA vs. Ambipar Participaes e | Cambuci SA vs. LPS Brasil |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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