Correlation Between Refinaria and Inepar SA
Can any of the company-specific risk be diversified away by investing in both Refinaria and Inepar 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 Inepar 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 Inepar SA Indstria, you can compare the effects of market volatilities on Refinaria and Inepar 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 Inepar SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Refinaria and Inepar SA.
Diversification Opportunities for Refinaria and Inepar SA
Very weak diversification
The 3 months correlation between Refinaria and Inepar is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Refinaria de Petrleos and Inepar SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inepar SA Indstria 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 Inepar SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inepar SA Indstria has no effect on the direction of Refinaria i.e., Refinaria and Inepar SA go up and down completely randomly.
Pair Corralation between Refinaria and Inepar SA
Assuming the 90 days trading horizon Refinaria is expected to generate 3.45 times less return on investment than Inepar SA. But when comparing it to its historical volatility, Refinaria de Petrleos is 2.67 times less risky than Inepar SA. It trades about 0.07 of its potential returns per unit of risk. Inepar SA Indstria is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Inepar SA Indstria on November 18, 2024 and sell it today you would earn a total of 11.00 from holding Inepar SA Indstria or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Refinaria de Petrleos vs. Inepar SA Indstria
Performance |
| Timeline |
| Refinaria de Petrleos |
| Inepar SA Indstria |
Refinaria and Inepar SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Refinaria and Inepar SA
The main advantage of trading using opposite Refinaria and Inepar SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Refinaria position performs unexpectedly, Inepar 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 Inepar SA will offset losses from the drop in Inepar SA's long position.| Refinaria vs. Lupatech SA | Refinaria vs. Recrusul SA | Refinaria vs. PDG Realty SA | Refinaria vs. OSX Brasil SA |
| Inepar SA vs. Lupatech SA | Inepar SA vs. Inepar SA Indstria | Inepar SA vs. Eternit SA | Inepar SA vs. Bombril 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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