Correlation Between Refinaria and Hrcules SA
Can any of the company-specific risk be diversified away by investing in both Refinaria and Hrcules 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 Refinaria and Hrcules SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Refinaria de Petrleos and Hrcules SA , you can compare the effects of market volatilities on Refinaria and Hrcules 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 Refinaria with a short position of Hrcules SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refinaria and Hrcules SA.
Diversification Opportunities for Refinaria and Hrcules SA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Refinaria and Hrcules is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Refinaria de Petrleos and Hrcules SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hrcules SA and Refinaria 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 Refinaria de Petrleos are associated (or correlated) with Hrcules SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hrcules SA has no effect on the direction of Refinaria i.e., Refinaria and Hrcules SA go up and down completely randomly.
Pair Corralation between Refinaria and Hrcules SA
Assuming the 90 days trading horizon Refinaria de Petrleos is expected to generate 0.88 times more return on investment than Hrcules SA. However, Refinaria de Petrleos is 1.14 times less risky than Hrcules SA. It trades about 0.22 of its potential returns per unit of risk. Hrcules SA is currently generating about -0.15 per unit of risk. If you would invest 260.00 in Refinaria de Petrleos on November 3, 2024 and sell it today you would earn a total of 33.00 from holding Refinaria de Petrleos or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Refinaria de Petrleos vs. Hrcules SA
Performance |
| Timeline |
| Refinaria de Petrleos |
| Hrcules SA |
Refinaria and Hrcules SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refinaria and Hrcules SA
The main advantage of trading using opposite Refinaria and Hrcules SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refinaria position performs unexpectedly, Hrcules 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 Hrcules SA will offset losses from the drop in Hrcules SA's long position.| Refinaria vs. Lupatech SA | Refinaria vs. Recrusul SA | Refinaria vs. PDG Realty SA | Refinaria vs. OSX Brasil SA |
| Hrcules SA vs. Hotis Othon SA | Hrcules SA vs. Inepar SA Indstria | Hrcules SA vs. HAGA SA Indstria | Hrcules SA vs. Refinaria de Petrleos |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |